On Thursday the share price of the $16 billion wealth management giant AMP Limited (ASX: AMP) slumped 5.3% to $5.51 after the group released its first quarter cashflows and Assets Under Management (AUM) figures along with a disappointing update on its Australian Wealth Protection division.
The shares have continued to sell-off on Friday with the stock down another 1.5% in afternoon trade to $5.43.
Here are the key points from yesterday's announcement:
- According to CEO Craig Meller "domestic and global investment market conditions continued to be challenging during the first quarter, subduing cashflows across our business."
- Net cashflows in the Australian wealth management division fell to $209 million from $342 million in the prior corresponding period. Weaker investor confidence, ongoing market volatility and advisers adjusting to an enhanced regulatory environment were cited as contributory factors to the cashflow slump.
- Total AUM declined by 2% to $112.6 billion on the prior quarter primarily due to negative investment market movements.
- AMP Capital experienced net cash outflows of $1.54 billion.
- The Australian wealth protection business was impacted by claims experience losses of $18 million, with the majority of the losses being in retail income protection across incidence and termination.
Value emerging?
Investors will have to wait a few more days to get a clear picture on what brokers and their analysts think of the latest update.
According to an ABC news report, investment bank UBS has already downgraded the stock from a "buy" recommendation to "neutral" and lowered its price target to $5.50 from $6.30.
With consensus earnings forecasts possibly at risk, and more broker downgrades likely, investors may be best off waiting on the sidelines for the time being.
