AMP - AMP Limited

[Sean K]

May have found a bottom here IMO. Higher high and low by the look. Dodgy inverse H&S target just under 9 bucks on a break through 8 which should happen today on the overseas action.

 

[MRC & Co]

I agree Kennas and ROE (on the technicals and fundamentals respectively).

I bought in today on the strong divergence of the XFJ to the XMJ. Time for another slosh of funds from one to the other.

 

[ROE]

Anyone reckon AMP could be a target for a big banks ?

There isnt much choice left for big banks if westpac & st george merge
and manage to cut cost and increase margin.. that would be a real threat for NAB and the smallest of them all ANZ (The four Pillars).

there are only Bendio, BoQ, Adelaide bank, Suncorp and AMP so it's first mover advantage that westpac has over her rival in grab st george.

 

[MRC & Co]

Yeh, definately could be a target.

BEN, BOQ, SUN in the same boat. (I beleive Bendigo and Adelaide bank are now the same: BEN).

NAB, CBA and ANZ will surely be out on the hunt.

 

[YELNATS]

NAB, CBA and ANZ will surely be out on the hunt.

Or any of these 3 could make a counterbid for SGB. Even if they weren't successful it could force an even higher price from WBC, which could give them some consulation.

 

[Garpal Gumnut]

It took AMP 4 years, mid 2003 to go from $3 to $10.

How long will it take for it to go back under $3 ? In the past AMP falls quicker than it goes up.

And the volume has increased since it started this most recent downtrend.

This is a weekly chart over the past few years for AMP. Its in a convincing down trend.

gg

 

[MRC & Co]

Yeh, it's not looking the best technically hey GG!

However, I still like it's fundamentals, not to mention, in a great demographic!

Can't say I can bring myself to short such a solid company.

 

[solomon]

AMP made most of their money from financial planning, superannuation, managed funds and insurance.

If they have any exposure to sub prime it would be their fund under management and even if they do it's other people money and they still pocket the fees maybe not the performance bonus fee but basic fees.

I'm not a holder, so just a thought or two for the mix.

If the market value of AMP's funds under management (fum) drops by 20% then they collect fees on 20% less fum which means fees drop by approx. 20%.

AMP make money when their investments backing insurance sales makes more than they have to pay out on claims. They aren't making money here, but losing it at the moment.

We aren't just in a bear market, we are in a financial collapse. So if Aussies ever start saving, they are going to be a little shy of giving their money to a financial - which impedes AMP's growth and so warrants a stock re-rating, and Aussies may well be shy of putting those hard earned $ into share markets because of the recent negative returns, so there is less money pushing market prices up including AMP's.

caveat: NFA - DYOR

 

[prawn_86]

Well i waded in and picked some up today. A couple days earlier would have been nice, but this is a 5+ year hold for me.

I think their earnings will hold up fairly well as they get 9% pa flowing in from SG contributions and they are well managed. Div yeild over 8%, so even if that is maintained for the next 2 yrs and then starts to grow again i'll be happy.

First long term purchase since the bear began.

 

[MRC & Co]

Not sure about the long-term future of the global economies, but AMP is one of the safer companies. Definately one of the better buys out there.

 

[brettc4]

I have been holding AMP for a couple of years now. I bought it for the dividend and that has been good, along with a couple 40c capital returns has meant that even with the drop, this one is still good for me.

Would be nice for the SP to be a little higher though

 

[prawn_86]

I have been holding AMP for a couple of years now. I bought it for the dividend and that has been good, along with a couple 40c capital returns has meant that even with the drop, this one is still good for me.

What was the go with those capital returns brett?

They were done through the tax office right? I couldnt find too much info on them, but i must admit i didnt look into them fully. Was it the last 3 yrs they issued them?

 

[brettc4]

I believe it was over 3 years, but I only got the last two.

They were paid as a special dividend but they had a ruling from the Tax office which said, you could take the 40 cents of your original purchase price. So it wasn't counted as income at the time, but meant you were up for it as a Capital gain when you sold, but obviously if you held it for more than 12 months you got the 50% discount.

So all in all, a very nice little surprise with deferred tax.

Brett

 

[prawn_86]

I believe it was over 3 years, but I only got the last two.

They were paid as a special dividend but they had a ruling from the Tax office which said, you could take the 40 cents of your original purchase price. So it wasn't counted as income at the time, but meant you were up for it as a Capital gain when you sold, but obviously if you held it for more than 12 months you got the 50% discount.

So all in all, a very nice little surprise with deferred tax.

Brett

Ok so hypothetical:

You purchased at $8, got 2 of the capital returns, when it came to selling you would claim you bought them for $7.20. Have i got that right?

Or was there an option to take the cash just as a dividend?

 

[brettc4]

You purchased at $8, got 2 of the capital returns, when it came to selling you would claim you bought them for $7.20. Have i got that right?

Exactly.
My accountant found it out, so I imagine a number would have put it as income on their tax return, I am not sure of the ATO took it, or modified their return and told then to take it off their buying costs.

 

[JTLP]

Prawn that surprises me that you purchased now. I just flicked open the chart and although i'm sure the whole index is ugly...amp hasn't really convinced me its in any sort of bottoming phase or uptrend...

Also GG provided some good analysis on what happens to AMP along certain trend lines...I think its a few pages back...

 

[prawn_86]

Prawn that surprises me that you purchased now. I just flicked open the chart and although i'm sure the whole index is ugly...amp hasn't really convinced me its in any sort of bottoming phase or uptrend...

Also GG provided some good analysis on what happens to AMP along certain trend lines...I think its a few pages back...

Yeh i did look at GGs charts and he makes a good point. But i did my calcs and research and am happy with my entry price.

Obviously i have no idea what the markets will do in the short term, but hopefully holding for 5 - 10 yrs if it goes down another 10% or so in the short term it wont really matter in the long run.

I bought this more for yeild than for 'trend' as such.

 

[prawn_86]

Wow, something put a rocket under these guys this arvo. Is it just confidence returning? (until the DOW tanks again)...

I now have to decide if i turn this into a short term trade and run a trailing stop. I certainly didnt expect it to move this much so quickly...

Decisons, decisons.

 

[YELNATS]

Ok so hypothetical:

You purchased at $8, got 2 of the capital returns, when it came to selling you would claim you bought them for $7.20. Have i got that right?

Or was there an option to take the cash just as a dividend?

Hi Prawn,

I've been a holder of AMP since their demutualisation in 1998.

AMP have had 3 capital returns in recent times.

From their website:

Quote

Capital returns
Payment date Record date Amount per share
18 June 07 25 May 07 40 cents
19 June 06 25 May 06 40 cents
16 June 05 26 May 05 40 cents

The Australian Taxation Office (ATO) has confirmed that capital returns will be treated as a reduction in the cost base of AMP shares, and not as a dividend, for Australian income tax purposes. A copy of the class ruling can be accessed on the ATO website www.law.ato.gov.au.

ie. this means no potential capital gains tax is payable unless and until you sell the shares in which case your cost base is reduced by one, two or three multiples of 40 cents, depending when you acquired the shares.

There was no option to take the amounts as a "normal" dividend.

As far as I know, AMP has no immediate plans to make further capital returns.

regards yn

 

[prawn_86]

Thanks YN.

Any explanation for the price jump today? Rally was especially strong towards slose and in the end of day auction.