Johannesburg - Liberty Holdings slumped the most since April 2009, after the South African insurer said full-year profit tumbled more than analysts expected.The stock slid almost 10.88 percent to R109.91 at the close on the JSE on Friday, the biggest decline of 162 securities on the all share index. Volumes traded in Liberty soared, reaching 2.7times the daily average over the past three months.
Earnings per share for 2016 dropped 40 percent to 60 percent from a year ago, Liberty said.
That compares with a median estimate of four analysts for a decline of 2 percent, according to data compiled by Bloomberg.
The insurer, controlled by the Standard Bank Group, said it was hit by weaker returns on investments, gains in the rand against the dollar, and a write-down of infrastructure holdings in its alternative portfolios.
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It also experienced higher risk claims and costs related to the reorganisation of its South African and East African asset-management business, and had to take accounting charges for the consolidation of a property unit listed on the Johannesburg bourse.
“Liberty has not diversified its business very successfully and it is struggling with its health business,” Tracy Brodziak, the head of research at Old Mutual Equities, said from Cape Town.
“There were clearly persistency issues,” she added.