AMP share price down 16% as key life insurance deal falls apart

Pressure continues to build for the troubled wealth management firm as a likely dividend cut and the stalled sale of AMP Life sends investors to the exits.

A media release from AMP Ltd this morning, outlining a likely dividend cut and difficulties concerning the sale of AMP Life, saw the company’s share price collapse as much as 16%.

Overall, this caps off a rough 12-months for the wealth management firm, with the stock now down over 40% as the full consequences of the Royal Commission weigh on the company.

AMP Life sale now ‘unlikely’

In its current form, the expected A$3.3 billion sale of AMP Life to London-based Resolution Life has been halted, following challenges to meet the relevant approval conditions from the Reserve Bank of New Zealand (RBNZ).

Due to the RBNZ not approving Resolution Life’s ‘change of control application’, the company noted that Resolution Life ‘does not expect the RBNZ to approve an application that would satisfy the condition precedent.’

In short, what this means is that in its current form, the A$3.3 billion sale of AMP Life will not go ahead.

Though disappointing, AMP remains hopeful that the sale can be salvaged in some form, maintaining that:

‘AMP is now working with Resolution Life to determine whether there is a solution that addresses policyholder interests, regulatory requirements and provides certainty of execution.’

Even still, this option looks highly uncertain, and with shares of AMP now trading at record lows, it seem investors are equally sceptical.

AMP ‘unlikely’ to maintain interim dividend

Adding to the disappointing news outlined above, the company this morning announced that it is unlikely to pay an interim dividend.

AMP pointed out that ‘given the uncertainty around the AMP Life transaction, the AMP Board expects to continue its prudent approach to capital management and anticipates that an interim dividend will not be paid for 1H 19.’

AMP’s healthy dividend would have been a drawcard for many income-oriented investors in the past, and as such, its cut is likely to have contributed to the precipitous decline of the AMP Ltd share price this morning.

Lastly, the company advised that a further update on their 1H 2019 financial results would be provided on August 8.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

European Central Bank meeting

Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.

  • How might the next meeting affect the markets?
  • What are the key rate decisions to watch?
  • Why is the Governing Council announcement important for traders?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.