Billions of rand later, Old Mutual may be returning to its roots

So Old Mutual has slapped a for-sale sign on its US business. Speculation is rife that the insurer may also offload its European business Skandia, to concentrate on expanding its presence in Africa.

Wouldn’t that be a rich irony? After pouring billions of rand down the drain in disastrous overseas ventures, the geniuses who run Old Mutual may find themselves back where they started: at the helm of a (highly profitable) South African life insurer.

The share price tells the story: reacting to the news of the planned sale, it jacked up more than 3% to R13.22, what it was at the IPO. If you bought Old Mutual shares five years ago – in the midst of one of the biggest market booms in history – you would still be down 10% today. If you’d bought Sanlam, which chose to stay in South Africa, you’d be 85% better off.

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3 Responses to Billions of rand later, Old Mutual may be returning to its roots

  1. selwyn marock says:

    I do not think anyone or any company expected this last
    meltdown that took place,it was more like a domino effect.Even Warren Buffett was trading right up to the end.

    smarock10@yahoo.com

    • Robert Brand says:

      Old Mutual’s troubles were not due to the financial crisis in the first place – the company was in trouble long before 2008/09. And its share performance has been much worse than that of other financial services firms over the medium to long term.

  2. selwyn marock says:

    Robert cannot argue have not been back in this Paradise long enough.

    smarock@yahoo.com

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