Financial Pumps: AMP, MPL, JHG, VUK and CGF

  • Dec 18, 2019 AEDT
  • Team Kalkine
Financial Pumps: AMP, MPL, JHG, VUK and CGF

The financial sector of an economy comprises of a broad range of firms and institutions like banks, investment companies, insurance companies, and real estate firms, that provide financial services to commercial and retail customers. The financial sector, which sits between savers and borrowers, through intermediation, plays a crucial role in the functioning of the economy. For instance, funds are taken from savers (for example, through deposits) and lent to those in need, be it households, businesses or governments.

Let’s look at the following five large financial sector companies listed in Australia that have generated positive stock returns in the last few months.

AMP Limited (ASX: AMP)

AMP Limited offers life insurance, superannuation, asset management products, pension related solutions, retirement planning and other diversified financial services to clients including individual customers, small businesses, corporations and superannuation funds across Australia and New Zealand.

Board Changes: On 11 December 2019, the company announced to have appointed Rahoul Chowdry as a Non-Executive Director to AMP Limited Board, with his tenure commencing 1 January 2020. He holds over 35 years of experience in leadership and senior executive roles in professional services.

Meanwhile, the company reported that a key Board member, serving as the Non-Executive Director on the boards of AMP Bank and AMP Capital Holdings, had decided to retire from the post. Mr Peter Varghese AO would retire at the end of his ongoing term (being the conclusion of the 2020 AGM). The company is scheduled to hold its Annual General Meeting on 8 May 2020.

Stock Performance: With a market capitalisation of around AUD 6.63 billion and approximately 3.44 billion shares outstanding, the AMP stock settled the day's trade at AUD 1.915, down 0.777% by AUD 0.015, on 18 December 2019. AMP has delivered a positive return of 4.89% in the last three months.

Medibank Private Limited (ASX: MPL)

Medibank Private Limited provides private health care coverage for hospital and ancillary services. Its products include health, travel, pet, and life coverage to overseas students and visitors.

FY20 Half Year - Key Dates: On 17 December 2019, Medibank announced key dates in relation to six months ending 31 December 2019 as:

  • 2020 Half Year Results Announcement: Thursday 20 February 2020
  • 2020 Interim Dividend Payment Dates:
    • Ex-dividend Date: Tuesday 3 March 2020
    • Record Date: Wednesday 4 March 2020
    • Payment Date: Thursday 26 March 2020

Lowest Premium Rise: On 7 December 2019, Medibank informed that the Federal Minister for Health today announced that private health insurance premiums would change across the industry, effective 1 April 2020. Meanwhile, Medibank received approval to increase Medibank and ahm health insurance premiums by an average of 3.27%, effective 1 April 2020 onwards, marking its lowest average premium rise in around 19 years.

Stock Performance: Medibank has a market capitalisation of around AUD 9.25 billion with ~ 2.75 billion shares outstanding. On 18 December 2019, the MPL stock settled the day's trade at AUD 3.370, edging up 0.298% by AUD 0.010. MPL has delivered a one-month positive return of 5.66%.

Janus Henderson Group Plc (ASX: JHG)

JHG operates as a global active asset management firm, which focuses on aiding investors achieve their objectives for the long-term. The company offers a broad range of investment solutions, such as equities, quantitative equities and fixed income, in addition to multi-asset and alternative asset class strategies.

Dividend: On 11 December 2019, Janus Henderson Group announced an update on a dividend distribution of USD 0.360 for CHESS DEPOSITARY INTERESTS 1:1 security relating to a period of one quarter ended 30 September 2019 (Record Date: 11 November 2019; Payment Date: 25 November 2019). The company mentioned dividend exchange rate information as the reason for the update.

3Q19 Results: For the three months' period ended 30 September 2019, the Group informed that the investment remained strong, driving better quarter-on-quarter flows with assets under management (AUMs) standing at USD 356.1 billion, reflecting slightly weaker markets and net outflows. The adjusted diluted EPS of USD 0.64 was recorded with annualised gross sales of USD 15.3 billion.

Stock Performance: Janus Henderson Group's stock settled the day's trade on 18 December 2019 at AUD 36.300, up 0.276%. JHG has also delivered positive returns of 23.59% year-to-date, 17.30% in the last six months and 12.39% in the last three months.

Virgin Money UK Plc (ASX: VUK)

Virgin Money PLC provides banking services such as savings, cards, mortgages, checking accounts, investments, cash management, certificates of deposit, money market, commercial lending, and online banking services. Virgin Money serves clients in the UK.

FY19 Highlights: During the financial year FY19, the Group delivered a resilient operating performance and strong progress on business transformation. The net interest margin stood at 1.66% and underlying profit amounted to GBP 539 million with a statutory loss after tax of GBP 194 million.

The Disciplined Mortgage Growth stood at 1.7% while Relationship Deposit Growth stood at 7.1%. The Group also reported that Digital Adoption improved by 51% and Colleague Engagement improved by 76%. Virgin Money achieved Annual Run Rate Net Cost Savings achieved of GBP 53 million with operating costs of GBP 942 million and a Cost to Income ratio increase of 57%.

Furthermore, Virgin Money's Underlying Return on Tangible Equity (RoTE) increased by 10.8% with a 13.3% increase in CET1 ratio.

Stock Performance: With a market capitalisation of around AUD 5.51 billion and ~ 1.43 billion shares outstanding, the VUK stock price settled the day's trade on 18 December 2019 at AUD 3.690. VUK has also delivered positive returns of 17.79% YTD, 15.32% in the last six months and 68.42% in the last three months.

Challenger Limited (ASX: CGF)

Sydney, Australia-based, Challenger Limited is an investment management firm, offering annuities and other retirement income products as well as managing assets for domestic and international clients.

September Quarter Results: For the first quarter of 2020 ended 30 September 2019, Challenger reported total assets under management (AUM) of $ 84 billion, up 3%. Moreover, Life net book growth was reported at $766 million, or 5.2% for the period, despite ongoing disruption in the Australian wealth industry.

Backed by strong Japanese sales, the company reported a 14% increase in total annuity sales to $842 million for the quarter. Funds management net flows stood at $ 437 million and funds under management went up by 2% for the quarter.

Stock Performance: Challenger Limited has a market cap of ~ AUD 5.12 billion with ~ 611.96 million shares outstanding. On 18 December 2019, the CGF stock settled the day's trading session at AUD 8.470. CGF has also delivered positive returns of 12.52% in the last three months and 2.96% in the last one month.


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