Prudential (LON: PRU) share value has been among the many worst-performing within the UK after the insurance coverage firm printed weak outcomes final week. The inventory has slipped up to now 4 straight days and is buying and selling on the lowest stage since November thirtieth of this yr.
Prudential faces vital challenges
Prudential printed comparatively weak monetary outcomes final week. In its monetary outcomes, the corporate stated that its new enterprise revenue retreated by 14% in 2022 to $2.18 billion. Its working free surplus rose by simply 6% to $2.19 billion whereas its revenue after tax dropped by over 55% to $1 billion.
The corporate faces vital challenges. A very powerful problem is the efficiency of its Africa enterprise. Latest information reveals that almost all African firms, together with heavyweights like Nigeria and South Africa are going by means of a tough patch because the Fed continues to hike rates of interest.
International locations like Nigeria, Kenya, and Ghana are all going through a big greenback scarcity and devaluation of their currencies. As I wrote right here, the Nigerian naira has dropped to a document low towards the US greenback and different currencies.
The identical scenario is enjoying in Kenya, the place the Kenyan shilling has crashed to about 150 towards the US greenback. It was at 100 earlier than the Covid-19. Worse, banks are actively limiting the quantity of US {dollars} they’re extending to people and corporations.
Ghana has been one of many worst-performing African nations this yr after it defaulted on its debt. Sadly, the scenario will proceed getting worse for many African nations.
This might see the extent of Africa’s unemployment fee bounce. Most significantly, this might influence the corporate’s earnings, that are often in {dollars}.
This pattern will nonetheless be offset by the efficiency in key Asian nations like China, Indonesia, and Malaysia. Mainland China and Hong Kong are anticipated to bounce again after final yr’s Covid restrictions.
Prudential share value forecast
PRU inventory by TradingView
So, is it protected to purchase Prudential shares? The day by day chart reveals that the PRU inventory value has been in a robust bearish pattern after it printed its monetary outcomes. It has moved to the bottom stage on November thirtieth. The shares have moved under the 50-day and 100-day exponential transferring common (EMA). These two averages are about to make a bearish crossover.
On the similar time, the MACD has moved under the impartial level whereas the MACD have continued slipping. Due to this fact, the inventory will doubtless proceed falling as sellers goal the important thing assist at 790p.