AMP stages fightback on sharemarket

By NZPA

Tuesday 30th July 2002

Embattled financial services giant AMP Ltd today rebounded on the Australian share market lifting almost one percent in a rising market.

The positive mood defied many analysts' predictions yesterday that AMP would lose further ground today after it said it was unlikely to achieve its long-term aim of 10 percent-plus growth in operating margins in 2002 because of the volatile stock market conditions.

By 10.20am Melbourne time, AMP was 13 cents stronger, or just under 1 percent, to $A14.70 ($NZ17.14).

One analyst said today that AMP's profit warning was linked to the equity markets which have staged a worldwide recovery in the past few days.

AMP had previously hoped to achieve growth of more than 10 percent in its core recurring operating margins in 2002.

AMP had told the market in May and June that reasonable improvements would need to occur in financial markets during the remainder of the year to help it meet its growth goals.

One analyst told AAP that AMP's announcement was not a surprise to the market given the recent weakness in the market.

"I don't think coming out and making a profit warning was any surprise to the market," the analyst said.

"But as markets continue to recover then there is the likelihood of AMP making its 10 percent growth margin they say is under pressure at the moment."

The analyst said he was realistic, rather than optimistic, of AMP achieving the target.

"It depends on the equity markets over the next five months," he said.

"If the equity markets keep on recovering, and we have already seen them rebound quite strongly, there is no reason why AMP cannot achieve that 10 percent target."

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