Why did the AMP share price fall 13% in FY22?

The AMP Ltd (ASX: AMP) share price had another rough trot in FY22 and finished around 13% in the red.

At the time of writing, shares in the financial services giant are trading at $1.01each, in line with their June 2022 levels.

In broader market moves, the S&P/ASX 200 Financials index (ASX: XFJ) has slipped 10% into the red this year to date and 8% in the past 12 months.

Why did AMP slide in FY22?

It seems the big falls in the AMP share price were underscored by key macroeconomic events.

In particular, the onset of global central bank policy tightening regimes saw investors begin to price in a new set of risks to the financial sector.

The first round of interest rate hikes came from the US with the Federal Reserve opting to lift its base rate by 0.25% in March.

The Reserve Bank of Australia followed in May, also lifting rates by 0.25%.

After speculation, June saw the US Fed and the Reserve Bank of Australia (RBA) raise interest rates by 0.75% and 0.5% respectively.

The effect of the rate hikes was felt downstream immediately in the AMP share price.

It shifted south in two major drops, one on 5 May and the other on 6 June, both days when the increases were announced, as seen below via the US federal funds rate (red) and the cash rate (blue).

After suffering heavy losses in November-December 2021, following the planned demerger of AMP Limited and the new PrivateMarketsCo, it caught buyers at the January lows.

From there, the AMP share price sailed to a 52-week high of $1.21 on 5 May, before the Fed played its hand, as described above.

In the last 12 months, the AMP share price has slipped more than 8% into the red and trades well off its pre-pandemic highs.

The post Why did the AMP share price fall 13% in FY22? appeared first on The Motley Fool Australia.

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More reading

• What dragged the AMP share price down 13% in June?
• ASX bank shares look out, AMP has new tech under the hood
• Down 10% in a month, here’s the latest for the AMP share price
• Will Australia plunge into a recession?
• Guess how much insiders have been spending on AMP shares?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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