For the National Australia Bank and the AMP, yesterday’s AXA Asia Pacific update was tantalising.
Less than a day after the NAB’s offer was rejected by the ACCC and the AMP’s now lapsed offer was cleared, AXA revealed very strong sales growth as it rides the buoyant Asian markets.
AXA told the ASX yesterday that it had a strong performance in its first quarter with sales in Asia particularly strongly.
The strong growth in Asia came largely in its South-East Asian operations.
“In South East Asia, new business index was up 92 percent to A$146 million (on an actual currency basis) with very strong growth in all markets and both agency and bancassurance distribution channels," the company said.
“New business index in India was up 13 percent to Rupee 1.5 billion (A$36 million) and up 85 percent in China to Rmb 95 million (A$15 million).
"Sales growth in Asia was particularly strong with total new business index of $289 million up 57 per cent on the first quarter of 2009 on a constant currency basis.
"AXA wealth management inflows in Australia were up two per cent in the quarter to $1.5 billion including $124 million in North sales.
"Total wealth management inflows including Alliance Bernstein were up 41 per cent to $2.2 billion.
"Total Australian individual financial protection new business was up 12 per cent to $23 million."
The reference to North is a touch ironic. It’s a financial management platform and AXA is invested heavily in it as a new business for the future.
It was the thing that forced the ACCC to give the thumbs down to the NAB offer and the thumbs up to the AMP, which doesn’t have a similar product.
The NAB does with its Navigator product, which it picked up when it bought Aviva last year.
The NAB made it clear yesterday it was going to fight for AXA Asia and was prepared to sell assets and businesses.
NAB shares were up 2.6%, or 75 cents, yesterday to $28.83 at the close as investors welcomed the fact that it would probably not have to make another large issue to fund the takeover.
That was a telling reaction for the bank’s management and board.
AXA shares fell 21c, or 3.3%, to $6.13 as investors took the realistic view that the AMP might win with an offer lower than the NAB’s.
And the AMP’s shares fell 1.7% to $6.29 as investors started worrying about the chances of a big cash issue to fund a successful bid for AXA Asia Pacific.
AXA said investment inflows in Australia grew 2% in the March quarter, compared with a year earlier, while total group funds under management, administration and advice remained stable over the period at $80.7 billion.
Under both the NAB and AMP proposals, the winning bidder would hold AXA Asia Pacific’s Australia and New Zealand operations with France’s AXA taking the Asian assets.
The growth seen in the March quarter underlines the silliness of hiving off the faster growing Australian operations.
No wonder the French parent, AXA SA, is desperate to get its hands on them. It should have to offer more.
