Shares in diversified financial services company AMP Ltd (ASX: AMP) finished the day less than 1% in the green on Wednesday at 90.5 cents apiece.
That's a welcomed reversal of a downtrend that's been in place since 10 February around about the time when AMP released its full year results for FY21.
AMP shares have since compressed hard from their previous high of $1.07 – achieved right before earnings – and are now around 16% behind at the close on Wednesday.
Why are AMP shares struggling?
ASX financial shares have softened over the past 4 weeks amid global conflict that has seen the 'weaponisation' of the global financial system.
Sanctions placed on the Russian central banking system and its ability to participate in global payments has rocked banking shares around the world.
The S&P/ASX 200 Financials Index (ASX: XFJ) has fallen 3% in the past month and is now down 5.5% since trading recommenced on January 4.
Meanwhile, the S&P 500 Financials Sector index (INDEX: SPF) has tanked 12% whereas the BetaShares Australian Financials Sector ETF (ASX: QFN), SmartShares Australian Financials ETF (ASX: ASF) and the Nasdaq Bank Index (NASDAQ: BANK) have each sunk 3.5%, 5% and 10% respectively.
Each of these proxies for the Australian and global financial sector illustrates that sentiment on financial shares is quite low right now, and investors are looking to unload their positions.
AMP is no different – its share price has collapsed almost 7% in the past month and is therefore trailing the diversified ETF products listed above.
Not only that, but AMP also opted to withhold paying a dividend in its most recent set of results, giving shareholders a lower total return and also less cover over the downside.
Seeing as AMP's share price has continued to decline over the past 1–5 years on a consistent basis, the trend observed over the last few weeks isn't out of the norm for shareholders.
In just the last 3-months, shares have tumbled from a previous high of $1.20 on 8 November – itself basically at 52-week lows as well.
So when taking a more pragmatic approach, arguably, the downward momentum was already in place for AMP, and the recent world-staged events were the right 'spark' to have them crashing lower.
A series of scandals, wrongdoings and ongoing investigations have marred the AMP share price during this time.
Check out AMP's performance on the chart versus the same instruments listed above, only this time over a 5-year period. The value gap continues to widen as time goes on.
AMP share price snapshot
In the last 12 months, the AMP share price has collapsed more than 38% after sliding another 10% this year to date.
During the previous month alone, shares have fallen another 6% and are also down 6% in the past 5 days of trading.
