Prudential’s share price driven higher by new business profit

on Nov 14, 2013
Updated: Oct 21, 2019
Listen Thursday, November 14: Prudential’s shares (LON:PRU) gained more than two percent in the morning today after the British based insurer reported higher new business profit thanks to strong performance in its Asian operations. As of 10.35 UTC the shares had climbed 31.72p or 2.55 percent to 1,274.72p.

Prudential’s new business profit – the company’s preferred measure of growth – increased to ₤1.95 billion across the group in the nine months to September 30, up from ₤1.74 billion in the same period a year earlier. New business profit jumped by 20 percent in Asia, compared with an 11 percent growth in the US and a 10 percent decline in the UK. The disappointing performance in the UK was attributed to lower sales of annuities.

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“Our growth in Asia is supported by a number of key long-term fundamentals: a fast-growing and increasingly wealthy middle class, a positive demography i.e. a young population, rising urbanisation, high savings rates, strong demand for accumulation and protection products and low insurance penetration,” chief executive Tidjane Thiam said in today’s statement. “Our third-quarter performance illustrates that these positive long-term fundamentals are not affected by short-term financial market fluctuations.”

Revenue in the nine months to September 30 climbed to ₤3.27 billion, from ₤3.08 billion for the same period last year. That was slightly higher than the ₤3.26 billion average estimate from a Bloomberg survey of analysts.
M&G, Prudential’s asset management business, reported net inflows of ₤5.1 billion in the third quarter. Total funds under management rose 11 percent to ₤301.9 billion while external funds under management were 18 percent higher at ₤142.8 billion. “We remain on track to achieve our 2013 ’Growth and Cash’ objectives,” Thjam said. “In Asia, our focus on meeting the long-term savings and protection needs of a rapidly growing and increasingly wealthy middle class remains a key driver of resilient and sustainable profit growth. Our US and UK businesses remain focused on delivering earnings and cash.”

**Analysts on Prudential**
Panmure Gordon reaffirmed its ‘buy’ rating and 1,453.00p price target on Prudential’s shares in a report issued to investors on Tuesday.
Four research analysts have rated Prudential’s stock with a ‘sell’ rating, four have given it a ‘hold’ rating and 15 have assigned it a ‘buy’ rating. The shares have a consensus rating of ‘hold’ and an average price target of 1,164.76p.
**As of 11.23 BST buy Prudential shares at 1,273.00p.**
**As of 11.23 BST sell Prudential shares at 1,271.00p.**
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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