You would think banks would be rejoicing after 12 interest rate rises in 13 months, as they rake in thousands more from each mortgage holder.
However, ASX shares for big finance have been on the nose this year as fears about an economic crash have stifled business.
For example, National Australia Bank Ltd (ASX: NAB) shares are now trading 12.8% lower than where they started the year. Westpac Banking Corp (ASX: WBC) is 9.4% down, while Commonwealth Bank of Australia (ASX: CBA) has lost 4.49%.
But one major bank is bucking the trend.
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The big bank that's not one of the Big Banks
Macquarie Group Ltd (ASX: MQG), at $71 billion, has a market capitalisation comparable to the big four.
However, its business model is very different from those retail banks.
"The earnings base is diversified across numerous financial markets and geographies, with two-thirds of its revenue generated in offshore markets," Fairmont Equities managing director Michael Gable said on his blog.
"The business mix is also highly diversified, with lending, client brokerage, and principal investments in both equities and credit, but its largest business is in capital-light asset management."
This is why the Macquarie share price has managed to avoid the recent malaise that the other big banks have endured.
The stock is up 10.65% year to date, all while paying out a 4.1% dividend yield.
But the past is the past.
If you are considering buying Macquarie shares now, what are the future prospects for the business?
'An attractive entry opportunity'
Gable reckons, for multiple reasons, the 2024 financial year earnings could "surprise on the upside".
The Commodities & Global Markets (CGM) division will have a huge influence on Macquarie's fortunes, he added.
"Given Macquarie has already said volatility in some of its CGM operations started to subside in 4Q23, it is reasonable to expect that FY24 earnings risks are likely weighted to the downside," said Gable.
"However, it is worth noting that similar risks in prior years did not eventuate. Further, management has a history of guiding conservatively on commodities."
The CGM unit's underlying client business grew an estimated 30% in the financial year just completed.
The coming year will see structural forces in the energy market carry the CGM business, according to Gable.
"These include US pipeline and storage constraints, growing international LNG trade, variability in global weather patterns, which creates demand for MQG as they specialise in the ability to [move] gas and power to where it is needed, and the energy transition towards wind, solar and nuclear."
Considering all this, Gable is convinced Macquarie shares are looking very tempting to buy right now.
"Macquarie shares are currently trading on a 1-year forward P/E multiple of ~14.5x, which is down from recent highs of ~20x," he said.
"We consider that the current weakness likely presents an attractive entry opportunity."
