Shares in Macquarie Group and Babcock & Brown were further pummelled yesterday amid rising investor concern that the global credit crisis would affect their ability to repay debt.
Macquarie, Australia's biggest investment bank, sank more than 23 per cent to A$26.05, down about 65 per cent on the year. B&B, the infrastructure investor, shed 17 per cent to close at a record low of A$0.76.
Kevin Rudd, Australia's prime minister, said the country's institutions were in a sound position. “There is a world of difference between the circumstances surrounding Australia's financial institutions and those which face financial institutions abroad,” he said. “We're not immune to those difficulties, but we are in a strong position to see Australia through.”
His words failed to reassure investors, and shares in the nation's leading five retail banks also fell, with National Australia Bank heading the list with a drop of 5.3 per cent to A$19.60.
Macquarie and B&B are being more severely punished by investors for having business models that rely on comparatively higher levels of debt.
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