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| Subject: The stock touched a record low of $9.10 | |
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Author: AMP shares fall to record lowJanuary 29, 2003 |
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Date Posted: 14:31:58 01/28/03 Tue ggecko1 (ID#: 413570) AMP shares fall to record low 29/1/03 9:08:17 AM 5974854 « Previous Message Next Message » AMP shares fall to record low By Geoff Elliott January 29, 2003 AMP shares crashed to a record low yesterday, as the free-falling UK stock market continued to weaken the company's capital base. The plunge in London's FTSE 100 also undermined the credibility of AMP chief executive Andrew Mohl, who'd predicted a strong rebound for the British market in 2003. The UK market sank 123 points, or 3.4 per cent, to 3480.80 on Monday night – levels not seen since 1995. It's fallen for 11 consecutive trading sessions, and is now down 12 per cent since the start of the year. In early European trading last night, the London stock market was showing gains. As soon as the Australian stock market opened yesterday, there was a frenzy of selling in AMP shares. The stock touched a record low of $9.10, before closing down 43c, or 4.4 per cent, to $9.37. The company's market value has now fallen by almost $12 billion in the past 12 months – including a further $500 million yesterday – as the stock price has halved in line with the falling UK market. Investors have seen the value of the company fall $1.7 billion since last week's forecast of a $900 million loss for the 2002 calendar year. As in the past week, the volume of shares traded was huge yesterday. More than 11.8 million shares changed hands as large institutional fund managers quit the stock. The extent of the selling will be revealed in coming weeks as institutional investors are required to release substantial shareholder notices. AMP is badly exposed to the UK market, where it has about 70 per cent of its investments through subsidiaries such as Pearl Assurance. Last week the independent financial watchdog in the UK, the Financial Services Authority, warned of a tough year ahead in the stockmarket, particularly for the life insurance and fund management sector. In the UK yesterday, the big insurance companies fell heavily on fears they could be forced into another round of capital-raising in order to meet prudential solvency safeguards. Aviva fell 7.9 per cent, with Royal and SunAlliance off 8.1 per cent, Legal and General down 5.2 per cent, and Prudential falling 7.2 per cent. The ongoing falls in the benchmark FTSE index could also force AMP to inject more capital into its operations, in order to maintain solvency margins under UK regulations. It's already been required to pump $1.4 billion into Pearl Assurance. Mr Mohl has assured investors that AMP doesn't have to inject more cash into its UK operations unless the benchmark FTSE 100 index falls below 3000 points. That trigger appeared unlikely as recently as last month, but the continuing falls put this threshold in sight, with the FTSE needing to fall another 12 per cent. Analysts said yesterday there were concerns that the value of AMP's UK operations – once estimated at $6 a share – had been cut to zero by investors. The UK market weakness has also dented the credibility of Mr Mohl, who was already reeling from last week's admission of further losses in the UK operations, barely a month after he assured investors there'd be no more provisions. Mr Mohl is now alone in his forecast, made in early December, that the FTSE index would hit 4,700 points by the end of the calendar year. That would require a 35 per cent jump – a rally looking increasingly unlikely as war jitters knock the confidence of investors around the globe. « Previous Message Next Message » This message has been viewed times Report a BullBoards Violation Ignore ggecko1 Post Reply View Threads [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| unless the benchmark FTSE 100 index falls below 3000 points. | AMP | 14:34:04 01/28/03 Tue |