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SYDNEY - Investors will be watching closely whether falling asset values cause Axa Asia-Pacific Holdings to post a net loss when it reports its full-year results tomorrow.
Its rival, AMP, which is Australia's biggest superannuation fund provider, revealed its profit figure on Friday, showing earnings have taken a hit from the slump in financial markets. AMP announces its earnings on Thursday.
Analysts expect Axa to report a net loss of A$265.33 million ($332.54 million) for the 12 months to December 31, according to Reuters data. This compares with A$638.7 million for 2007.
They expect operating earnings, which takes out the fluctuations caused by the movements in asset prices, to be little changed, at A$544.5 million.
"The conditions are tougher this time," Tyndall Asset Management analyst Jason Kim said. "The market is getting pretty nervous going into the result."
Axa shares have slumped 15 per cent this month and closed at A$4.02 on Friday. That follows the downgrade in expected profit by brokers including Merrill Lynch, JPMorgan and Credit Suisse.
Axa said last month profits would be hit by disappointing investment earnings and A$150 million of writeoffs as the group's funds under management slumped 23 per cent in value.
It said 2008 operating earnings would be slightly better than 2007's.
Kim said Axa had a large exposure to Hong Kong's pension market where much of the investments had guaranteed returns for clients and, while the company had hedges in place, investors were worried whether it could meet those payments in full.
"They should provide clarity on those, but till then, people will be nervous."
He said he was less concerned about AMP, which on Friday announced that underlying profit for 2008 would fall 9 per cent to around A$800 million, in line with market expectations.
The announcement helped AMP shares rise 2 per cent on Friday to A$5.10, a high for the month.
- AAP
