Old Mutual share price hit by weak South African growth

 
Tim Wallace
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Old Mutual Wealth saw sales edge up by one per cent (Source: Old Mutual)
Asset manager Old Mutual yesterday said its third-quarter sales were down, as weak economic growth in South Africa and the falling rand started to bite.

Sales volumes fell five per cent to £6.2bn, from £6.5bn in the same quarter of 2013.

Emerging markets sales fell most sharply, down 13 per cent to £2.4bn, on poor South African prospects.

Even excluding the depreciation of the rand, South African sales fell three per cent to 31.1bn rand (£1.7bn).

But Old Mutual Wealth – with big UK and global arms – saw sales edge up by one per cent to £3.8bn.

“While economic activity remains subdued in South Africa, with consumers remaining under pressure, the government’s medium term budget policy statement is positive for the economy as a whole,” said chief executive Julian Roberts.

“Growth remains robust elsewhere in Africa. The UK retail financial services market is large and developing fast.”

Analyst William Howlett at S&P Capital IQ kept his stock recommendation on hold.

He cut his earnings per share forecast for Old Mutual by four per cent on the back of the falling South African currency.

Old Mutual’s shares fell immediately on the results, but climbed back to end the day up 0.21 per cent.

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