Will Standard Life Aberdeen shares fly under Stephen Bird’s wing?

Will the recent Standard Life Abedeen share price gains continue? Changes at the top suggest a positive outlook but it may be a long-term deal.

The Standard Life Aberdeen (SLA) share price chart has shown more peaks than troughs in recent weeks. However, changes at the top could cause the positive run to end. For those tracking the Scottish investment company’s share price over the last four weeks, prices have been bullish. Following a five-year low in March (189p), shares have gradually recovered.

When the markets closed on 17 July, the Standard Life share price was 264p. For short-term investors that jumped on board in March, times are good right now. The omens took on yet more positives at the start of July, when chief executive of the fund Keith Skeoch announced he was stepping down.

Could management change signal a new era for Standard Life?

Former Citigroup banker Stephen Bird will take the helm before the end of September, a move that has been hailed as a positive. Bird is no stranger to guiding businesses through times of change. During his time at Citigroup, he oversaw a number of mergers and acquisitions. With Standard Life still reeling from a less-than-smooth merger with Aberdeen Asset Management, a change at the top undoubtedly signals a new era.

Not only will Bird have the power to right previous wrongs and create new business, but his presence will also draw a line under the merger orchestrated by Skeoch. In essence, investors are currently seeing the incoming of Bird as an outgoing of the old regime and, thus, many of its previous problems. Indeed, as a fund, SLA has returned less than 5% over the last year. The returns drop even lower over a five-year timeframe with the stock underperforming the FTSE 100 by more than 8% per annum.

Are Standard Life shares set to soar?

Will SLA shares soar under the wing for Bird? This is a matter for debate. His appointment will almost certainly give the SLA share price a lift. In fact, we are already seeing the positive effects of the news. However, there is a strong likelihood that the early part of his tenure could cause another dip. With the company’s dividend yield not currently covered by underlying earnings, a cut is likely. Expectations are that the rate of 8% could be reduced to somewhere within the 4% range.

That is certainly not a poor yield given the current climate. However, a drop of any sort is bound to have a negative impact on the SLA share price for at least a short amount of time. The other issue Bird will look to address is the company’s main assessment management business. The market has become increasingly competitive over the last five years due to cheaper passive funds. Generating new business in this area will be tough.

Highs may only come after lows

Teething troubles with the asset management business could give the new chief executive problems in the short-term. This, in tandem with a cut to dividend yields, points to a period of turbulence for the SLA share price. The recent gains are a sign that, overall, investor sentiment is optimistic. However, there are those who are cautious that a turnaround might not happen quickly, if at all. Many are, therefore, hedging their bets on the SLA share price.

Assuming Bird can put his previous experience to good use, the long-term outlook is positive. However, those with faith in Bird may have to endure some turbulence. A long-term buy rating is certainly on the cards for SLA shares, but on the proviso that a period of change could cause prices to take a dive. The current assumption is that a short-term drop will be for the greater good. However, anyone looking to invest has to accept that too much of a dip may leave SLA grounded indefinitely.

How to trade stocks with IG

Looking to trade the Standard Life Aberdeen and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Standard Life PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

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

liveprices.javascriptrequired

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.