Old Mutual share price reacts to positive operational update
Old Mutual has released an operational update for the 9 months ending September 2023.
Old Mutual has released an operational update for the 9 months ending September 2023.
Salient features from Old Mutual’s operational update are as follows:
- Global growth has remained resilient in 2023, with China's economy surpassing expectations in the third quarter. However, South Africa still faces challenges, particularly with loadshedding, although there has been some improvement in power restoration efforts.
- Several African markets continue to struggle with currency depreciation against the USD and a shortage of dollars, while high inflation and elevated interest rates impact customers' disposable income in all markets. Despite these challenges, the business remains well-positioned for growth.
- Life APE sales, excluding China, have shown strong growth, increasing by 13% compared to the prior period in 2022 and 23% compared to 2021. Sales benefited from solid risk sales, higher credit life sales, and improvements in productivity levels.
- Gross flows have increased by 8%, driven by higher inflows in Old Mutual Africa Regions, particularly in offshore investments in Namibia and higher unit trust sales in East Africa. Annual premium increases and single premium inflows have also contributed to the growth.
- While there has been significant growth in net client cash flow in Mass and Foundation Cluster, Personal Finance, and Old Mutual Africa Regions, there have been significant outflows in Old Mutual Investments and Wealth Management due to clients requiring liquidity in challenging economic conditions. However, capital has been raised in the higher margin Alternatives business to support future revenue generation.
Old Mutual – technical trading view
The share price of Old Mutual continues to trade in a rangebound environment. The rangebound environment is noted by the price continuing to whipsaw back and forth through the 200-day simple moving average (blue line).
Range traders might consider long entry should today’s candle close where it is currently trading. Circled blue we see a bullish price reversal just above the 11.75 support level. Should the reversal confirm into close, 12.50 becomes the initial upside resistance target, while a close below 11.75 might be used as a stop loss indication.
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