At time of writing, the share price of AMP Ltd [ASX:AMP] is up 1.92%, trading at $1.325.
From a low on 24 March of $1.08, the AMP share price broke up to $1.48 on 17 April, representing a more than 35% gain in less than a month.
The AMP share price has since lost ground, and appears to be in a holding pattern as the market moves sideways:
Source: tradingview.com
We take a look at AMP’s latest update, and the outlook for the AMP share price.
Looking to shift away from AMP shares? Learn more about the two types of asset classes that we think could beat the market during the COVID-19 downturn.
AMP share price reflects cash outflows
Here are the lowlights from its most recent update:
- Wealth management assets under management (AUM) of $116.3 billion for 31 March, down from $134.5 billion on 31 December
- Wealth management net cash outflows of $1.9 billion up from $1.8 billion for the quarter from the same period last year
It’s hard to spin this kind of haemorrhaging of cash as positive.
The AFR’s recent Chanticleer column referred to ‘glimmers of hope’ such as the strong(ish) performance of its North platform.
North’s assets under management grew 26% in 2019 to a total of $47.6 billion.
AMP share price outlook hinges on its ability to adapt
If AMP’s North platform, along with AMP Capital, are the only parts of the business that seem to be holding their own…its pretty clear what has to happen.
Ditch wealth management (or transition it to a tech-based model), finally ditch the Life business and focus on doing less with more.
A range of fintechs, neolenders and neobanks mean a competitive environment for AMP now and into the future.
As such, despite a recent bounce, the outlook for the AMP share price could be called ‘clouded’ to say the least.
CEO Francesco De Ferrari faces a long and uncertain road to right the ship, and many shareholders will likely be hoping for an aggressive modernisation push, given the five-year share price slide.
We discuss the latest trends within the financial services industry in Australia in our daily e-letter Money Morning. Take out a free subscription today. We aim to inform and provoke, all with the aim of making you a smarter investor. Recent topics include the flow on effects of negative oil prices and the impending avalanche of debt brought on by the coronavirus. Learn more here.
Regards,
Lachlann Tierney,
For Money Morning
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