Forum Archive Index - January 2004

["Karyn W" <karyn_in_oz@hotmail.com>]

It depends on whether you take a long term view of things or not I guess.  
Remember Australia doesnt have ACC so insurance is mandatory here, for 
everything!  Also we have compulsory superannuation contributions to make 
(now 9% of salary).

So it's two main areas of business have excellent profit/growth prospects - 
the insurance market in australia is in pretty good shape now that HIH is no 
longer around to drive premiums down (there has been double and triple digit 
increases in insurance premiums since!); and this years increase in the rate 
of compulsory superannuation contributions means even more money is now 
flowing into super fund management.  AMP simply by default will pick up a 
share of that, thereby inflating their management fees.  Property is 
currently providing terrible returns, equities will get a helping hand as 
investors switch.  Since the big 4 banks see funds management as their 
profit/growth prospects of the future (hence potential takeover by NAB) 
there is a definate opportunity for the share price to improve long term.

I dont think its brand has been harmed too much as AMP has done a good job 
of blaming the overseas business (HHG) for its downfall, and its problems 
related to its own management not mismangement of customer funds.

However, I think most people are hanging on for the expected NAB takeover 
bid, or until they get a clearer picture of what AMP's financials are like 
without HHG.  Most brokers have a HOLD recommendation on it.
Karyn

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