Ninety One Limited (JSE: NY1), South Africa’s largest asset manager by assets under management (AUM), has faced a challenging trajectory, with its share price dipping 7.28% year-to-date.
Despite its stature, recent financial disclosures revealed a decline in full-year AUM, totalling £124.2 billion as of December 31, 2023, marking a notable 6% drop from the preceding year’s £132.4 billion. In the midst of these figures lie deeper insights into the company’s performance. Operating profit saw a downturn of 9% to £97.9 million in the six months to September 30, 2023, with operating profit margin holding steady at 32.6%. Meanwhile, basic earnings per share experienced a 5% decrease to 8.9 pence, prompting an interim dividend payout of 5.9 pence per share.
The CEO attributes these challenges to a confluence of factors, including surging interest rates and escalating geopolitical uncertainty, fostering an environment of investor caution. Characterising Ninety One as a “risk-on” business navigating a “risk-off” landscape, the company’s results have been marred by subdued investor appetite for emerging markets and public equities at large. As the intricacies of Ninety One’s performance unfold, deeper questions arise regarding its resilience amid global economic uncertainties.
Technical
Ninety One’s price action reflects a downtrend, persisting below its 100-day moving average within a descending channel pattern.
Notably, support and resistance were established at R38.02 and R41.11 per share levels, respectively. Recent heightened downside volumes exerted downward pressure on the share price, yet today’s trading session brought a notable 2.70% surge.
This sudden rebound hints at potential shifts in market sentiment. If the upward momentum endures, a retest of the R41.11 resistance level becomes likely. Conversely, a resurgence of selling pressures could exacerbate declines, potentially targeting the R38.02 support level. As traders gauge these technical dynamics, the interplay of support, resistance, and volume underscores the delicate balance between bullish and bearish forces shaping Ninety One’s trajectory.
Summary
Ninety One’s challenges, amidst declining AUM and profits, are compounded by global economic uncertainties. Its share price, which is in a downtrend below the 100-day moving average, faces key technical levels at R38.02 support and R41.11 resistance. Market sentiment shifts may sway its trajectory, highlighting the delicate balance ahead.
Sources: Ninety One Ltd, Reuters, MT Newswires, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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