Just when AMP Limited (ASX: AMP) shareholders thought things couldn't get any worse after shares plunged to a record low of $1.77 yesterday, it's now being reported that some professional analysts think the fallen financial services giant might have to raise capital in the year ahead.
According to an article in today's Australian Financial Review analysts at Morgan Stanley are worried the company may be short of capital now its planned circa $750 million sale of its AMP Life business to Resolution Life has been blocked by the Reserve Bank of New Zealand then.
The kick in the teeth for investors is that any capital raising would probably need to be done with AMP's shares near record lows, which means it would be highly dilutive to shareholders with regard to AMP's turnaround plans.
In other words a capital raising at a discount to existing exchange traded prices could floor AMP's share price for a very long time as any earnings per share would be even more thinly spread out in the future.
The only elixir being a sharp turnaround that sees a return to decent dividends, although this looks a long shot unless it can do its AMP Life deal or execute other radical restructuring plans quickly.
Elsewhere on the local bourse Perpetual Ltd (ASX: PPT) shares are down again today, after it reported $1.1 billion in net quarterly outflows yesterday.
