Why AMP Ltd Shares Popped Higher This Afternoon

What Happened to the AMP Share Price?

Shares of AMP Ltd [ASX:AMP] are up more than 3% in afternoon trading as the company announced a $500 million share buyback.

Why AMP Ltd Shares Popped Higher This Afternoon

The company announced a big drop in profit for 2016, and plans to cut jobs. At the same time, AMP announced it would begin a share buyback, to buy up to $500 million-worth of stock on the market.

This sent the share price up by more than 3%. It’s the continuation of a welcome bounce for the AMP share price. It’s trading a long way below the peak it reached in 2002 of $11.76, but the past few months have seen the stock build some momentum.

With a $500 million buyback in place, this could provide some support for the stock, and push it on to further gains.

What now for AMP Ltd?

A buyback isn’t the be-all and end-all for a stock. But, providing a company can at least meet market expectations in terms of revenue and profits, the buyback can provide a decent amount of buying support for a stock. The AMP share price has been super volatile over the years, but with a buyback in place, it’s possible this could add some stability to the shares.

Regards,

Kris


Kris Sayce, dubbed the ‘Jeremy Clarkson of Australian finance’, began as a London finance broker specialising in small-cap stock analysis on London’s Alternative Investment Market (AIM). Kris then spent several years at one of Australia's leading wealth management firms. A fully accredited advisor in shares, options, warrants and foreign-exchange investments, Kris was instrumental in helping to establish the Australian version of the Markets and Money e-newsletter in 2005. He is the Publisher, Investment Director and Editor in Chief of Australia's most outspoken financial news service, Markets & Money.


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