Asset manager floats
M&G shares steady on debut amid market volatility
John Foley: expects volatility (pic: Terry Murden)
CLOSE: Shares in M&G closed slightly down on their debut on the London Stock Exchange today amid uncertainty over the Brexit deal.
Following its demerger from Prudential, M&G is expected to join the FTSE 100. The shares peaked today at 228.2p against an opening price of 220p, before closing down at 217.7p valuing the company at £5.66 billion.
The company manages £341 billion of funds for retail investors and institutions as well as operating Prudential’s UK insurance operations. It will maintain the Prudential brand for savings and insurance customers in the UK and Europe and for asset management in South Africa. M&G Investments will be its customer-facing brand for asset management clients globally.
M&G’s chief executive John Foley told a media briefing in Edinburgh earlier this month that apart from current uncertainty in the markets he expected a period volatility in the shares as existing Prudential shareholders decide whether to hold stock in both companies. Prudential shareholders will hold one new M&G share for every Pru share they own. Shares in Prudential were the 9.3% lower at 1,371.75p.
Mr Foley today said: “Today’s listing marks a very significant milestone for M&G. Our independence and unique business mix means we are well-positioned to benefit from long-term economic and social trends that offer growth opportunities for many years to come.
“We will continue to build on our strong track record of value creation as we focus on delivering our capital generation and other objectives as an independent business.”
Asian stocks edged up overnight as Chinese shares reversed early losses, supported by hopes for progress in resolving the US-China trade war, while sterling slipped after the UK parliament delayed a crucial vote on a Brexit withdrawal deal.
The pound rose mid-morning to $1.30 against the dollar after rebounding from earlier falls. At 2pm the FTSE 100 was 20 points higher at 7170.
Despite the climate of uncertainty, M&G is in growth mode. It has 1,700 staff in Edinburgh and Stirling and is expanding its offices in the capital. It is also investing £875 million in 40 Leadenhall in the City of London, where it will develop a new 905,000 square foot prime office complex. The site has permission for the development of two towers, providing 14 and 34 storeys of predominantly office space.
Tony Brown, global head of M&G Real Estate , said: “London’s commercial property market currently offers good value relative to other capital cities such as Paris and Tokyo, partly due to Brexit-related uncertainty.”