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(The Globe and Mail)

Financial Times

Despite selloff, gutting Aviva dividend the right move

Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

Two steps forwards, two steps back. Aviva’s share price fell 13 per cent to £3.15 on Thursday and is now only just above the price when former chief executive officer Andrew Moss left the building last May. In the meantime, shares hit £3.88 as investors warmed to a restructuring story but the announced 44-per-cent dividend cut has some investors slamming the book shut. What a contrast with the last time Aviva cut its dividend in 2009; that decision was greeted with a 5-per-cent rise in the share price.