The AMP Ltd (ASX: AMP) share price has struggled this week and landed itself around 3.5% in the red.
That’s behind the return of the broad indices this week, and really just a continuation of the longer-term trend it has been on over the past 12 months.
Let’s dive in a little deeper to understand the full picture.
What has led us to this point?
The AMP share price is still reeling the effects of the Royal Commission into Misconduct into Banking, Superannuation and Financial Services Industry, which turned into a 3-year ordeal for the company.
This has undoubtedly plagued AMP shares over the last three years, particularly after AMP admitted wrongdoing in its “fees for no service” policies that the company was found guilty on.
However, ASIC dropped its investigations into AMP’s conduct in July this year. Keep in mind that the Royal Commissioner had recommended criminal proceedings in the outcomes of the hearing.
Nonetheless, there’s been no recovery for AMP shares from this event. They came off highs of $5.43 back in March of 2018 and have cratered over 81% to currently trade at $1.05.
What else is weighing in?
Alongside this, AMP’s series of failed deals with Ares Management Corp over the last 2 years has been a weighting factor in its share price.
Ares sought to acquire AMP back in 2020, before withdrawing from the deal. However, the pair were back at it again in 2021, trying to establish a joint venture (JV) to hold AMP Capital’s private markets segment.
The deal would have netted AMP a $1.55 payoff. But as they say, history doesn’t repeat itself – it rhymes – and Ares and AMP simply just let the 30-day exclusivity period conclude.
Then there are AMP’s demerger plans to form two separate entities – AMP Limited and Private markets. The former will focus on the retail investing crowd, whereas its other business will be a global investment manager.
AMP’s decision here aligns with the spate of demergers that have occurred or have been proposed for ASX listed entities over the last 12 months.
Not even a robust FY21 earnings report was enough to reverse the longer-term downtrend AMP shares have been stuck in since the beginning of this year.
There’s been no market sensitive information released by the company this week, so the AMP share price is likely decreasing this week as a continuation of the longer-term trend.
AMP share price snapshot
The AMP share price has posted a loss of 33% this year to date, extending the loss over the last 12 months to 33%.
Both of these returns have lagged the S&P/ASX 200 index (ASX: XJO)’s return of 25% over the past year.