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Why is the Macquarie (MQG) share price on a high today?


Shares in the investment banking giant have risen 44% in the last 12 months.

Macquarie Group (ASX: MQG) shares are among the top traded shares on the ASX on Tuesday. The stock again climbed over the $200 level and was up 4.2% at $202.13 at the time of writing.

By comparison, the rest of the banking sector was subdued, with Commonwealth Bank (ASX: CBA), ANZ (ASX: ANZ) and National Australia Bank (ASX: NAB) all slightly lower while Westpac (ASX: WBC) was the only one among the Big Four in positive territory.

Why are investors cheering on the Macquarie stock price?

The buzz in the stock comes after the asset management and investment banking giant provided a third quarter update on Tuesday.

While Macquarie did not provide any financials with its update, it said combined December quarter net profit contribution from the commodities and global markets unit as well as the investment banking division was “substantially up” on the same period a year earlier.

The divisions also posted a higher profit contribution for the group’s year-to-date financials, helped by “exceptionally strong investment realisations in the infrastructure, business services and technology sectors". Macquarie’s financial year ends on 31 March.

Its commodities and global markets division saw a gain on the partial sale of the UK Meters portfolio and strong income in the gas, power and resources segments where customers traded and hedged their positions. However, this was partially offset by the timing of income recognition on storage contracts and transport agreements.

“Improved overall market conditions have resulted in a record quarter for the Group,” CEO Shemara Wikramanayake said in a presentation.

Improved outlook

She said the group was maintaining a “cautious stance” on the outlook, but remained well positioned in the medium term. Macquarie didn’t provide guidance for its overall full year profit, but it did outline improvements in its divisional outlooks.

For 2022, it expects commodities income to be “significantly up” on last year, an improvement from its previous forecast for income “in line” with the prior year.

In the investment banking division, Macquarie Capital, the group is more upbeat, expecting transaction activity to be “significantly up” in the second half of the year.

Macquarie had assets under management of $750.1 billion at 31 December, 2% higher than 3 months earlier.

The group reported a better than expected $2.04 billion profit for the 6 months ended 30 September, more than doubling profit from a year earlier and also doubling its interim dividend payout to $2.72 per share.

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