Intermediate Capital Group PLC (LSE: ICG

Intermediate Capital Group PLC (LSE: ICG) nis an FTSE 100 listed, United Kingdom-based global alternative asset manager. The Company manages capital on behalf of its global client base, principally across long-term closed-end funds. It provides various capital solutions for corporates and owners of real assets, and creates value for stakeholders, shareholders and communities. The Company operates through two segments: the Fund Management Company (FMC) and the Investment Company (IC).

Rationale – Watch at GBX 2,159.04

Q3 FY24 Trading Update (Released on 25 January 2024)

• Technical Update: ICG’s stock price is in the uptrend forming higher lows and higher highs, which is depicted in the one sided rally from GBX 1,300 levels. The current rally could be poised for a small correction which could present an investment opportunity. The Relative Strength Index is currently pointing at 61.53, which could enter into the sell zone on any slightest of uptick. Also, the UK markets (FTSE 100) is currently at life high, and any correcntion could cause the price correction in the Fund Management and Alternative Asset Management industry.
• Trading Update: The firm manages a total of USD 86.3 bn in assets, with USD 68.4 bn generating fees and USD 15.2 bn not yet yielding fees. Fee-earning assets increased by 6.5% during the Q3 FY24 on a reported basis and by 3.4% on a constant currency basis, demonstrating an annualized growth of 20.6% over the last five years. Fundraising activities in the quarter amounted to USD 3.6 bn, primarily from Senior Debt Partners (USD 1.8 bn) and Strategic Equity (USD 0.8 bn), with an additional USD 0.9 bn raised through scaling strategies.
• Inefficient Debt Management: During H1 FY24, the company reported a higher Debt/ Equity ratio of 2.81x, when measured against the industry median of 0.12x. Further, the % of long-term Debt to the Total Capital of ICG was 70.6% in H1 FY24, as compared to the industry median of 4.0%.

Share Price Chart

Conclusion 

Due to the current macroeconomic condition, higher interest rates, poor sentiments, and considering the outflows and technical chart pattern, a "WATCH" recommendation on Intermediate Capital Group PLC (LSE: ICG) has been given at the current market price of GBX 2,159.04 (as of 10 May 2024, 09:30 AM GMT+1).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 10 May 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 4: Dividend Yield may vary as per the stock price movement.