Prudential Financial Share Forecast October 2021 – Time to Buy PRU?

Shares of the Fortune 500 company Prudential Financial (LSE: PRU) – the investment management and financial products provider, are in the green today, at 1442.0p as of October 4th (10:30 GMT+1). Despite a losing streak the previous month, Prudential got off to a good start on Monday. The share was down a staggering 8% at one point before bouncing back. It occurred after the insurance company announced preparations for a new Hong Kong share market debut. In this scenario, does PRU make a profitable investment for the future? Let’s find out.

Prudential Financial – Technical Analysis

As per the financial statement from Prudential Financial, the market cap of the holding company is at £37.777B with total assets worth £372.963B. Total revenue for 2020 was £43.65 billion, compared to £73.48 billion a year ago.

Moving averages for PRU such as Exponential Moving Average (20)(1442.1), Simple Moving Average (20)(1443.8), Exponential Moving Average (30)(1446.3), and Simple Moving Average (30)(1470.5) are pointing towards selling. Oscillators including Relative Strength Index (14)(49.2), Stochastic %K (14, 3, 3)(81.3), Commodity Channel Index (20)(−5.1), and Average Directional Index (14)(17.0), on the other hand, are neutral.

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Recent Developments

Prudential has confirmed proposals to raise capital in Hong Kong by issuing additional shares, as it seeks to expand its Asian investor base and enhance the liquidity of the shares. Following the demerger of its US division last month, the organisation announced it was contemplating raising additional funds. Prudential has chosen to raise up to 5% of its issued share capital in Hong Kong, or up to 130.8 million shares, and has indicated that it may issue up to another 32.7 million additional shares if market permits.

Prudential expects to raise about HKD22.5 billion (£2.14billion) at such pricing. The share capital is scheduled to begin trading on the Hong Kong Stock Exchange’s Main Board on Monday, October 4. Prudential is currently listed in London and Hong Kong as a primary share, with subsidiary listings in Singapore and New York.

Prudential claimed the proceeds from the share issue will be employed to repay $2.3 billion in high-interest debt, allowing the company to increase its financial flexibility. The remaining assets will be put into Asia and Africa, where Prudential estimates the most long-term growth opportunity lies. As per Bloomberg, Prudential wants to grow its client base in both areas from 17 million to 50 million by 2025.

Additionally, from Q2 2020 to Q2 2021, Prudential’s adjusted operating income per share more than quadrupled, while adjusted book value per common share increased by 13.4% year over year.

Should You Buy Prudential Financial Shares?

The life insurance company has considered Asia the focal point of its expansion plan. As a result, the trust of the shareholders in the organization was shaken due to concerns about the region’s economy. However, we also need to keep in mind that the announcement occurred at a point when prices were plunging due to Chinese concerns. Evergrande, a Chinese corporation and the world’s most indebted real estate developer, has been the source of anxiety for shareholders. So maybe it wasn’t the most favourable time for PRU to announce plans to expand into the Chinese market.

Nevertheless, there are still reasons to be optimistic about the FTSE 100 Company’s massive Asian bias, which should help the company to profit from rising income levels in those locations in the coming years. Despite the potential of a Chinese slowdown in the coming years, it is reasonable to believe that Prudential is one of the finest companies to hold in October.

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