November was a rollercoaster month for the AMP (ASX:AMP) share price. Here’s why

What’s happened to the company’s shares last month?

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The AMP Ltd (ASX: AMP) share price continued its downward trend last month, falling to a low of 97 cents. Investors dumped the financial services company’s shares following a busy month of announcements from the company.

For the month of November, the AMP share price recorded a loss of around 4.17%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) also ended November in the red, shedding 1.56% over the same timeframe.

At market close on Tuesday, AMP shares finished flat for the day at 92 cents apiece. It’s worth noting the company’s share price is nearing its multi-decade low of 88.5 cents reached in September.

What’s happened to AMP recently?

Last month, AMP provided an update regarding its planned demerger for AMP Limited and AMP Capital’s Private Markets business (PrivateMarketsCo).

The company noted that it is making strong progress on the operational separation of PrivateMarketsCo. The demerger is expected to occur during the first half of 2022.

Furthermore, AMP advised that a clear perimeter has been set with the agreed sale of the Global Equities and Fixed Income (GEFI) business. This will see the transfer of the Multi-Asset Group (MAG) to AMP Limited.

Creating a more simplified company is expected to improve efficiency, as both businesses operate in very different markets. The demerger will enable AMP to accelerate the growth strategies for each and focus on servicing the diverse customer base.

On the back of the release, investors pushed up the AMP share price by 3% to $1.035 on the day. However, this was short-lived as the company’s shares fell by 10% over the following two days.

Investment house Macquarie believes AMP shares are trading at attractive levels. While cutting its outlook by 1.8% to $1.10, the broker still sees value in the company.

Swiss investment bank UBS had a different approach though, reducing its rating by a sizeable 21% to 90 cents. UBS also downgraded its view to “sell” from the previous “neutral” stance. The broker appears reserved on AMP demerger plans. It believes the company won’t unlock any near-term value for shareholders.

It appears investors are taking on UBS’s advice, leaving the company’s shares to hover around the 90-cent mark.

AMP share price snapshot

Over the last 12 months, the AMP share price has moved almost 50% lower with year-to-date down by more than 40%.

On the other hand, the S&P/ASX 200 Financials Index (ASX: XFJ) has gained 15% from this time last year and is up 18% year-to-date. The sector also registered a 52-week high of 6,956.4 points in late October.

Undoubtedly, AMP shares are lagging the Financial Index which has continued to accelerate since March 2020.

On valuation grounds, AMP presides a market capitalisation of roughly $3 billion, and has approximately 3.27 billion shares outstanding.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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