AMP (ASX:AMP), Macquarie (ASX:MQG) shares in focus after completion of GEFI sale

Highlights

• AMP Limited has completed the sale of its Global Equities and Fixed Income (GEFI) business to Macquarie Asset Management (MAM).
• In early morning trading hours on Monday, the shares of AMP Limited were spotted trading 0.524% lower at AU$0.950 per share on ASX.
• The S&P/ASX 200 Financials index (ASX:XFJ) has gained over 11% in the last one year.

The shares of AMP Limited (ASX:AMP) traded in red on Monday after the ASX-listed blue-chip wealth management company announced that it has completed the sale of its Global Equities and Fixed Income (GEFI) business to Macquarie Asset Management (MAM). Macquarie Asset Management is a part of Macquarie Group Limited. According to the company, as part of the agreement, assets under management (AUM) of ~AU$47 billion will be transferred from AMP Capital to MAM (subject to unitholder approvals). 

Today, the shares of AMP Limited were spotted trading 0.524% lower at AU$0.950 per share on ASX at 10:21 AM AEDT. AMP shares have lost 26.92% over the last 12 months, while the company’s shares are 5% down on year-to-date (YTD). If one looks at the previous 5-year data, we see the stock is underperforming compared to the broader financials sector. 

The S&P/ASX 200 Financials index (ASX:XFJ) has gained over 11% in the last one year. It has climbed 6% in the past month. Today, the index was up 0.536% at 6743.100 points at 10:34 AM AEDT. The favourable price movement of the benchmark is because of the recent momentum in the financial sector. 

Image Source: © Sbotas | Megapixl.com

About GEFI sale:

Today’s announcement revealed that the sale announced on 8 July 2021 was subject to several conditions, which have now been satisfied. Following the completion of the transaction, AMP will receive an overall completion amount of nearly AU$63 million in cash from MAM. 

AMP has mentioned that it continues to remain eligible for an additional cash earn-out of up to AU$75 million payable after the second anniversary of completion of transaction. This is subject to certain conditions, such as revenue targets. The amount is uncertain as the retention of AUM is the main driver.

Read More: ASX 200 to rise ahead of budget day; BHP, Endeavour to pay dividends today

About Macquarie Group Limited

Macquarie Group Limited (ASX:MQG) is an ASX-listed company that provides services related to banking, financial, advisory, investment as well as funds management. Today, Macquarie Group shares traded 0.571% higher at AU$199.00 per share on ASX at 10:50 AM AEDT. The shares of Macquarie Group Limited has gained over 31% over the last 12 months.  

Read More: SKT, SWM: Two ASX media stocks with over 34% gains in past 6 months

In July 2021, Macquarie had announced that MAM had signed a binding agreement to acquire AMP Capital’s Global Equity and Fixed Income (GEFI) business. This acquisition included fixed income, listed Australian equities, listed real estate and listed infrastructure, with consideration of around AU$185 million. The Group commands a market capitalisation of AU$75.91 billion.

It is worth mentioning that AMP shares have not fared considerably well in the last few days, though the stock ended higher on Friday. One reason for this could be the company’s decision to withhold its dividend in its full-year financial results for 2021 (FY21).