Macquarie outlook disappoints

Macquarie warned in its trading update that some market conditions were weakening, creating concerns over its Australian equity capital markets business.

The bank is the No. 2 underwriter in the domestic equity market, and Australia and New Zealand contribute nearly half the revenues of its advisory and fund management business.

Macquarie, dubbed the 'Millionaire's Factory' for its generous banker pay, said second-half profit could be 10 percent higher than the first half's, excluding one-off items, putting it in line with consensus forecasts of A$1.07 billion (595.6 million pounds) for the year to end-March.

Investors, however, were disappointed as Macquarie attached

disclaimers to those projections.

"People were trading a bigger number and they didn't get it," said Donald Williams, fund manager at Platypus Asset Management. "Had that number excluded the amount of money they made from buyback of the management rights of a few of their vehicles, then it would have been fine," said Williams.

Macquarie shares saw their biggest intraday fall in more than eight months, dropping as much as 7.3 percent. They closed down 6.1 percent at A$47.28, the lowest close since December 22.

Trading volume in the stock was heavy, with over 4.6 million shares changing hands, two and half times the average daily volume over the past 90 days.

It was the bank's biggest one-day fall since Australia ended a short-selling ban on financials that was put in place after the upheaval during the global financial crisis.