One of the curiosities of trading on the ASX towards the end of June each year is the heavy buying activity of Macquarie Group in its own stock.
Macquarie filed a substantial shareholder notice yesterday to notify investors that its interest in itself had risen to 7.1 per cent or 27.7 million shares.
Macquarie Group Limited was the biggest individual buyer of MQG stock last week, after it purchased 559,775 shares worth A$103.7 million on 20 June and another 407,832 valued at $74.5 million the next day.
This meant that Macquarie Group Limited accounted for 47.5 per cent of all MQG shares purchased on-market on 20 June and roughly 25 per cent of total buying activity recorded on 21 June.
The company typically enters the market for its own shares in June because it is the pricing period for share incentives made available to senior executives and other staff.
The shares purchased on-market effectively offset the new shares issued to staff for their bonuses. Macquarie cancels the shares its purchases on-market to neutralise the dilutive impact of the bonus issuance.
Dean Paatsch, a co-founder of market governance consultancy Ownership Matters, says Macquarie’s trading activity at this time of the year is well understood in the market and is legitimate given the company’s remuneration structure.
However, Paatsch and many other investment advisers are concerned that Macquarie is only required to disclose details about its buying activity when its substantial interest rises by 1 per cent or more.
“We would prefer they did a daily announcement to let the market know that they are in the market as buyers,” said Paatsch.
“On some days they are the largest buyer in the market.
“We think this is so significant that they should be declaring what they’ve bought at the end of each day as is the case when companies are doing share buybacks.”
Macquarie’s big buying last week did not appear to have a significant impact on the MQG share price.
The stock rose by only 0.64 per cent on 20 June when Macquarie accounted for almost half of all MQG shares bought on the ASX.
The stock price fell 2.55 per cent on 21 June.