FirstRand Ltd., South Africa’s second-largest financial services group, fell the most in two years after distributing its Momentum Group Ltd. insurance business to investors.
“Momentum made up about 18 to 20 percent of FirstRand’s earnings, so with its unbundling we were stripping out quite a lot of value,” Sam Moss, investor relations director for the Johannesburg-based company, said in a phone interview today.
FirstRand merged Momentum with Metropolitan Holdings Ltd. earlier this month to create MMI Holdings Ltd., South Africa’s third-biggest listed insurer after Sanlam Ltd. and Old Mutual Plc. Now that FirstRand is no longer trading with the right to its annual dividend, the company’s stock has dropped to reflect the lender’s value without Momentum’s assets, Moss said.
FirstRand fell 11 percent to 18.64 rand in Johannesburg trading. That pared the stock’s gain this year to 18 percent and valued the company at 105.1 billion rand ($15.2 billion). MMI rose 1.3 percent to 17.12 rand for a market value of 25.7 billion rand.