AAP

Wealth management company AXA Asia Pacific Holdings Ltd expects operating earnings for the first half to be "quite satisfactory".

The company said current share market volatility had resulted in a challenging investment environment that would affect the financial performance of companies in the financial services sector in the short term.

AXA Asia Pacific chairman Rick Allert declined to provide shareholders with a forecast of net profit for the current six-month period at the company's annual general meeting.

"The markets are quite volatile. I think the market - the ASX/200 - has fallen 15 per cent from January 1," Mr Allert said.

"That obviously affects our investment performance.

"Our operating earnings will be affected somewhat by the lower asset value.

"But we're pleased with the way the company is going operationally, and our operating earnings will be quite satisfactory."

Chief executive Andrew Penn said that at the company's results presentation in February, it had indicated that for an average 10 per cent decrease in equities markets over the year, the sensitivity of earnings was estimated to be $120 million, comprising $12 million of operating earnings and $108 million of investment earnings.

Mr Allert also told shareholders that greater disclosure and transparency was needed in the area of securities lending.

Mr Allert said that in common with industry practice, AXA Asia Pacific did have securities lending programs in place in Australia and Hong Kong.

He said AXA supported the government's view that securities lending and short selling added to the debt and liquidity of the financial market when conducted in good conscience and transparently.

"However, whilst the holding of physical shares is the subject of considerable disclosure and other governance processes, short selling activities are not subject to the same degree of transparency," he said.

"We share the concerns raised in relation to inappropriate short selling, and believe there should be at the very least, the same disclosure and transparency on short selling as there is in relation to the holding or disposal of physical shares.

"As such, we are currently reviewing our securities lending contract to investigate ways in which we can mitigate the risk that any of the shares we lend can be used for inappropriate purposes."