MMI Holdings Ltd. fell the most since it was created from the merger of two South African insurance companies in 2010, after posting a decline in first-half profit.
The stock retreated 4.8 percent, its biggest one-day drop since November 2010, to 18.30 rand in Johannesburg trading. MMI’s net income for the six months ended Dec. 31 declined 25 percent to 805 million rand ($106 million) from a year earlier, the Cape Town-based insurance company said in a statement today.
“Relative to its peers MMI hasn’t performed as well as the market would have liked and Liberty Holding’s results looked much better last week,” Martin Strauss, an equity trader at PSG Konsult, said by telephone from Pretoria today. MMI looks expensive on a price-to-earnings basis, Strauss said.
MMI Holdings, which has operations in 12 countries outside of South Africa, was created out of a merger of FirstRand Ltd.’s Momentum Group Ltd. and Metropolitan Holdings Ltd. If conditions remain stable, MMI should be able to complete the merger and achieve double-digit earnings growth by 2014 or 2015, Nicolaas Kruger, chief executive officer of MMI, said in a telephone interview from Johannesburg today.
It is the second-worst performing stock on the FTSE/JSE Africa Life Assurance Index this year after Sanlam Ltd., having risen 7 percent compared with the average increase of 8.4 percent.