By Andrew Nelson<\/p>\n
Investors are shrugging off a 75% drop in half year net profit at AXA Asia Pacific Holdings ((AXA)) to focus on the underlying numbers. Shares in the French owned insurer rallied more than 8% after reporting an 11% lift in operating earnings.<\/p>\n
The operating earnings result of $295 million, which strips out about $230.4 million in investment losses booked on its $35 billion book. This was apparently great news in a market where few are expecting stellar results from investment managers.<\/p>\n
Last week Credit Suisse predicted a 1H operating result of $288 million, but with the share price already giving up 42% this year, an expected result was just the medicine.<\/p>\n
Looking forward, the company set the bar low, saying it expects global equity markets to continue to provide a challenging environment, at least in the short term.<\/p>\n
Chief executive Andrew Penn hedged his bets, saying it remains very difficult to predict how the current market will play out.<\/p>\n
“It is our job to focus on the long term because the long term trends in our industry continue to be attractive, and that is exactly what we will do,” he said.<\/p>\n
More insulated from recent global weakness (although it may not feel like it), Australian operating earnings helped drive the result, increasing 22% to $141 million.<\/p>\n
AXA appears to also have been well served by diversification into Asia and more specifically Hong Kong, where operating earnings were up 23%, while South East Asia increased 84%.<\/p>\n
New business rose 16% in Hong Kong compared to a 17% decline in Australia, underlying the company’s increasing dependence on its Asian operations.<\/p>\n
Penn concurred, saying Hong Kong remained an attractive market and an important growth engine for AXA.<\/p>\n
New Zealand was a drag on the bottom line, with operating earnings down 11% to and the value of new business down 5%.<\/p>\n
Penn was more upbeat about the long term outlook, especially in Australia, where he believes the market to be underinsured.<\/p>\n
“In Australia compulsory superannuation enhanced with recent tax changes will continue to make this an important driver of growth for our industry,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Shares of AXA Asia-Pacific surged after the company’s interim results met analyst expectations.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/54525"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=54525"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/54525\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=54525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=54525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=54525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}