FirstRand spikes after MMI unbundling

2010-12-06 10:50

Johannesburg - Shares of FirstRand [JSE:FSR] jump 2.65% to R18.45, after being adjusted to take into account the spin-off of its Momentum unit.

FirstRand, South Africa's second-largest bank, merged the unit with an another insurer, Metropolitan, to form MMI Holdings earlier this year.

Under the terms of the deal, FirstRand shareholders gained 16.9 shares in MMI for every 100 shares in FirstRand.

Shares of FirstRand notionally closed at R20.84 on Friday, but the official price was adjusted to R17.98 by the Johannesburg Stock Exchange to reflect the MMI stake.

"I think the market has taken heart from the unbundling (of MMI)," says one trader.

Separately, FirstRand said on Friday it expects first-half earnings to rise by at least 20%, helped by the spin-off of Momentum.