What dragged the AMP share price down 13% in June?

June saw investors digest the reality of aggressive tightening from the world’s central banks.

| More on:
a businessman in a suit tries to forge ahead but is carrying a rope attached to a large anchor that is stuck in the ground against a background of muted sky and barren earth.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The AMP share price dropped almost 13% in June
  • Most financial shares came under pressure amid steep rate hikes from global central banks
  • A number of the company’s executives saw the retrace as an opportunity to buy more shares

The AMP Ltd (ASX: AMP) share price was up 10% for the calendar year when the closing bell rang on 31 May.

Then June rolled in.

Over the course of the month, the AMP share price fell 12.8%, ending June trading for 96 cents.

To be fair, it wasn’t just the ASX 200 wealth management company that came under heavy selling pressure in June.

The S&P/ASX 200 Index (ASX: XJO) dropped 8.9% over the month. And financial shares did it even tougher, as witnessed by the 11.9% drop in the S&P/ASX 200 Financials Index (ASX: XFJ).

What headwinds was the company battling?

The AMP share price took a beating last month along with other financial companies as investors digested the reality of aggressive tightening from the world’s central banks.

June saw the US Federal Reserve boost the official rate by an outsized 0.75%, with chair Jerome Powell indicating a series of rate hikes to come.

Meanwhile, the Reserve Bank of Australia (RBA) also came through with a 0.50% rate hike here, also surprising to the upside.

But some of the company’s top executives appeared to believe that the retreating AMP share price was overdone and represented a good buying opportunity.

As my colleague James Mickleboro reported, independent non-executive director Mike Hirst bought 100,000 shares at the beginning of June in a couple of on-market trades. Hirst paid an average of $1.097 per share.

Two other independent non-executive directors – Kate McKenzie and Michael Sammells – also put more skin in the game. They each bought 50,000 AMP shares priced at around $1.10.

AMP is currently trading for $1.01 per share.

AMP share price snapshot

Since the closing bell on 30 June, the AMP shares have gained 5.2%, well outpacing the 0.9% gain posted by the ASX 200.

Year-to-date shares in the wealth manager are up 1.0%.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

More on Financial Shares

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Broker Notes

Why has the Suncorp share price gone backwards since the ANZ takeover news?

What's going on with the Suncorp share price?

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Financial Shares

What’s $1 billion between friends? Magellan share price shrugs off latest FUM figures

It's up and then it's down. Investors are having trouble deciding whether today's news is good or bad.

Read more »

A man sits at a desk with a phone in one hand, his other hand on his chin and studies a computer screen in front of him with what appears to be cryptocurrency data on both screens.
Financial Shares

Up 13% in July, can the AMP share price maintain its momentum?

AMP shares have caught a bid since July.

Read more »

a woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.
Financial Shares

Is the NAB share price a buy ahead of next week’s quarterly update?

Here's what one expert predicts in the bank's upcoming results.

Read more »

Two hikers high five each other having climbed to the top pinnacle of the mountain.
Earnings Results

Pinnacle share price surges 13% on 2022 financial year profit growth

Pinnacle said the second half of the financial year was unquestionably a more difficult environment than the first half.

Read more »

Toppled chess piece on top of pile of coins
Financial Shares

ASX share price sinks as CHESS replacement delayed

Looks like it's not CHESS mate just yet.

Read more »

a woman sits in her home with chin resting on her hand and looking at her laptop computer with some reflection with an assortment of books and documents on her table.
Financial Shares

What could a tighter household budget mean for NIB shares?

At least one broker is optimistic on the health insurer's outlook.

Read more »

a man sitting at a computer at a desk has a look of anguish and trepidation on his face as he opens his eyes wide and made an aargh type expression with his mouth as his hair stands on end and his tie also stands on end with one part over each shoulder in what is supposed to be a humorous picture of something in a panic.
Earnings Results

Credit Corp share price drops 15% as core debt buying market flounders

The debt-focused finance company reported a 9% increase in net profits after tax for the full financial year.

Read more »