Yovich & Co. Weekly Update - 06 May 2013
May 6, 2013 | Commentary
This Week's Themes
• The local market finished the week slightly lower after hitting another all time high mid week, with fund managers selling stock to free up cash for the Mighty River Power Listing.
• A strong earnings report from ANZ saw the share price reach an all time high and led the Aussie market higher as investors continue to seek strong yield.
• The U.S. payroll report surprised everyone to the upside, spurring investors and pushing the Standard and Poor's 500 Index and the Dow Jones to new highs.
• With the ECB lowering its benchmark interest rate, European stocks rose to a seven-week high.
• The Kiwi continues to rally as the carry trade for higher yields gathers momentum.
AMP Limited – Exposure to a Growing Superannuation Industry.
AMP Limited (AMP) is an Australasian wealth manager and life insurer and is comprised of:
• AMP Financial Services (85% of earnings), Australia's largest financial planning network and provides wealth management products and services in both Australia and New Zealand, and
• AMP Capital Investors (15% of earnings), one of the largest investment managers in Australia and the largest investment manager in New Zealand.
While the Financial Sector in Australia is at all time highs, thanks to record profits being made by the big four banks, AMP is languishing behind. With the compulsory contribution rate planned to increase from 9% to 12% over the next 6 years, AMP is leveraged to benefit from a growing superannuation industry.
Morningstar has an accumulate recommendation and $7.00 price target with the below forecasts, current price is $5.38 AUD.
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