Opinion: The Macquarie bubble has burst, unearthing its COVID vulnerabilities
The earnings update from Macquarie Group should burst the bubble it has constructed over the past 10 years since the GFC that says its earnings are much more dependable because of its growing reliance on annuity type investments.in the September half relative to the previous corresponding is a reality check. Sure Macquarie’s earnings are less volatile than they were during the global financial crisis but they remain volatile nonetheless.
On Monday investors got a taste of just how leveraged Macquarie’s earnings are to the markets and economic environments in which it operates - and how susceptible those earnings are to shocks the size of the current black swan event.It has leverage to the upside also, so at some point when markets and economies return to normal Macquarie should return to its positive trajectory. Therefore when the environment is favourable it over-earns.
On the lending side, Macquarie has experienced the same pressures as our major trading banks with deferred interest on lending to small business and consumers resulting in a hit to income and an increase to the risk for bad debts. So when it quotes that annuity-style activities make up 63 per cent of its business mix in 2020 this includes revenue that can move about significantly.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Multi-billion dollar coronavirus lifeline for Victorian businesses unveiled, as Melbourne lockdown relaxed from midnightThe Victorian government has unveiled a new $3 billion business support package to assist local businesses, as Metropolitan Melbourne prepares for changes to its coronavirus lockdown from midnight tonight.
Read more »
Coronavirus LIVE updates: Victoria seek less cases as first link found between hotel quarantine and aged care; New South Wales Health issues alert; Australia's death toll rises to 803Victorian Premier Daniel Andrews will appear before the official inquiry into the state's ill-fated hotel quarantine program to answer questions about its failures.
Read more »
Forty one cases, seven COVID-19 deaths in Victoria as 'buddy bubble' day loomsVictoria has recorded 41 cases of COVID-19 on Sunday, with seven additional deaths across the state. It comes as single Melburnians prepare to welcome 'bubble buddies' and other changes to tough lock down restrictions from tomorrow
Read more »
Coronavirus LIVE updates: Victoria seek less cases as first link found between hotel quarantine and aged care; New South Wales Health issues alert; Australia's death toll rises to 803NSW has recorded nine new cases of COVID-19 in the latest 24-hour reporting period. Four have been linked to known clusters, four are in returned overseas travellers and one case remains under investigation. Follow the latest coronavirus updates here:
Read more »
Victoria records 41 new COVID-19 cases, seven deaths | Sky News AustraliaPremier Daniel Andrews has confirmed Victoria recorded 41 new COVID-19 cases and seven deaths overnight. \n\n“There are now 723 people who have died in Victoria because of this global pandemic, that’s an increase of seven since yesterday’s report,' Mr Andrews said.\n\n“Six of those seven deaths are connected to aged care outbreaks.”\n\nMr Andrews also confirmed 116 Victorians are in hospitals- with that number continuing to go down- 11 of those are in intensive care and five of those 11 are on a ventilator.\n\nImage: News Corp Australia
Read more »
Theatre and arts prepare to return in a post-COVID worldThe arts was among the industries worst-hit by the coronavirus pandemic and with the curtain about to go up on live shows again, hand sanitiser and social distancing are taking centre stage.
Read more »