Why is the AMP share price looking up today?
Shares in the wealth management giant have been largely stable in the last 6 months.
AMP (ASX: AMP) investors have not had much reason to cheer over the last 2 years as legal and management woes have beset the wealth management giant, smashing its market value. However, on Thursday, the stock seemed to be witnessing a rare bounce back, up nearly 5% to $1.17 in early trading.
Why has the AMP stock price lifted?
The latest share price move comes on the back of AMP providing an update on its third quarter cash flows. It reported funds of $180.3 billion under management as at 30 September, down from $187.6 billion at the end of June.
Investors were more focused on the fact that the company’s core Australian wealth management unit reported lower outflows in the quarter, largely due to the end of a government program allowing the early release of their superannuation funds to tide over the pandemic.
Net cash outflows at AMP's main wealth management business were $1.4 billion in the 3 months to September, down from $1.8 billion in the same period last year. Overall assets under management at the unit were little changed at $131.2 billion.
AMP has faced persistent outflows since the financial services royal commission in 2018 found widespread misconduct at the company, which prompted the exit of senior executives and left AMP struggling with top leadership issues since then.
In the last quarter though, AMP saw better than expected returns in the market, with investment gains offsetting $1.4 billion of net outflows from the wealth business.
AMP’s North wealth management business also added $1.7 billion in assets, while AMP Bank increased its loan book by $300 million to $21.3 billion.
The encouraging numbers come at a crucial time for AMP, as it prepares to spin off its private markets investment arm AMP Capital, which manages about $50 billion in infrastructure and real estate assets and operates in markets across North America, Europe, the Middle East and Asia.
“With most of Australia in lockdown during the third quarter our businesses have focused on supporting customers, continuing to drive forward our simplification and preparing for our demerger next year,” AMP’s new chief executive Alexis George said in a statement.
“We have a clear focus on our priorities ahead, including to deliver the demerger of our Private Markets business from AMP in the first half of next year.”
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