Standard Life Shares

StevieJ

http://www.indiaprwire.com/pressrelease/insurance/2009021619792.htm

sabretoothtigger

16-02-09 BRIEF-Deutsche Bank revises targets on UK insurers
AFX UK Focus
Feb 16 (Reuters) -

DEUTSCHE BANK RAISES FRIENDS PROVIDENT PRICE TARGET TO 100P FROM 95P
DEUTSCHE BANK CUTS LEGAL AND GENERAL PRICE TARGET TO 70P FROM 82P
DEUTSCHE BANK CUTS STANDARD LIFE PRICE TARGET TO 255P FROM 260P

Insurer Legal & General has had to cut most bonus rates on its with-profits policies as the economic

slowdown bashed investment markets in 2008 and into 2009.

Its with-profits bond lost 18.3% of its value last year, but still returned 27% before tax over the past five

years.

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=2617060

I dont see life insurance falling harder then other sectors or sl especially.

I was wrong here, over

the year this sector has suffered 20% worse then the ftse so theres a good chance that will continue and SL is

moving with that unperforming sector quite consistently now.
The sector is back at its lowest point right now



The sector is back at its lowest point right now and I do see some support at this level for SL but it is getting dragged down.
Ive no idea on future movement for the sector.
SL fell sharply to a week low today and may fall below 170 - 165 - 140

The UK's Standard Life Bank Plc plans to issue a two-year sterling government-guaranteed bond, IFR reported on Wednesday.
Guidance is set at mid-swaps plus 27 to 30 basis points, said IFR Markets, a Thomson Reuters online news and market analysis service.
Barclays, HSBC, JP Morgan, Lloyds and UBS have been named to manage the deal, IFR said.

Sad they need a guarantee but good it can get liquidity at all I guess

Shares in UK insurers continue to fall, led by Legal & General which failed to reassure investors in an update on Tuesday on its capital position, despite quelling rumours of a rights issue.
Shares in L&G are down as much as 12 percent, dropping near to a record low of 38.5 pence on Monday after speculation of capital raising and possible dividend cuts in the press.
A trader says: "The statement they put out didn't reassure anyone."

"As the market falls, their assets are going to fall. Its a vicious circle, the lower we go, the lower they go," he says.

SHARES in the UK's major insurance companies fell yesterday on fears that they will have to raise additional capital to strengthen their balance sheets.

But Standard Life, which has already sold on the annuity risk that is plaguing rivals such as Legal & General, was one of the sector's best performers despite closing down 5.7 per cent at 187.1p

Preliminary results for 2008 announced on 12 march and shares go ex dividend on 18th march

sabretoothtigger

Life assurers are in trouble - don't invest in them


In a financial crisis, it never just rains. It pours.
As the economic picture worsens, more and more weak links are revealed. Banks are going bust, new scams are being uncovered every other day – even whole countries are tottering on the brink of insolvency.
And it seems the life insurance sector is next in line to feel the pain. Potential carnage in corporate bonds is forcing these companies to make big loss provisions.



Not only is that very bad news for these firms' shareholders, but the overall fallout could be quite shattering. Here's why...
Why life assurers are like bookmakers

Life assurers are a bit like bookmakers. Rather like taking money on a horse race, they sell policies which offer protection against death or serious injury. For that they collect premiums. If your horse loses, the bookie wins. Likewise if a policyholder doesn't claim, the life assurer keeps the money.
Assuming the actuary gets his sums right, the life assurer makes a profit. But this cash has to be invested somewhere. And the last bear market from 2000 to 2003 taught Britain's life assurance companies some harsh lessons on this front, when stock markets dropped sharply and hammered their asset bases.
So the assurers reacted by unloading what they thought were some of their riskier assets - some £100bn-worth of equities, according to insurance analyst Ned Cazalet. Then, in 2004, the industry's solvency rules changed. That meant life companies were required to hold more capital than they had previously.
Analysts then assumed that these businesses would now be better protected against the next bear market.
After getting burned in equities, the life assurers made a biggish bet on corporate bonds, which are basically company-issued IOUs paying a fixed rate of interest. At the end of last year, these securities comprised between 20% and 30% of their investment portfolios, said Citywire's Edward Lander, making the life assurance sector the biggest single investor in the sterling non-gilt bond market.


Fears are rising that bond issuers won't make their repayments

And here's where the problem arises. While good quality corporate debt looks good value now (see Find your way round the bond market), anyone who has been holding lots of it over the last three years will now be carrying some big capital losses. What's more, fears of default risk, i.e. the chance that bond issuers won't be able to make their repayments, have been climbing again.

This has caused the latest problem for the life assurers. Legal & General has had to move in line with Standard Life, Prudential and Aviva by vastly raising its 'non-payment' provisioning. L&G's "default allowance" for its £17bn corporate bond fund has been upped by a staggering four times. "The planned additional reserves... follow a thorough sector-by-sector review of our portfolio, and default experiences from the 1930s and subsequent recessions", said the firm.

This means that life assurers are now factoring in corporate bond defaults hitting post-Great Depression levels - the peak was in 1935. Yet as The Times' David Wighton points out, this may not be gloomy enough. "The market thinks it's going to be even worse. Bond prices currently assume that as many as two in every 100 top-rated companies will fail to make their debt repayments, far higher than after the 1929 crash". In other words, the market is now reckoning that 2% of the best businesses will effectively go bust.
As for the riskier companies, Moody's reckons that nearly 20% of all European 'speculative grade' companies will fold in 2009.
This could be seriously bad news for investors in life assurers. For example, L&G shareholders have already seen their investment plummet in value by some 80% over the last 10 years. If the group has to make even bigger provisions, it'll surely be forced into either a dividend cut, or a large rights issue to raise more money from shareholders – or maybe both. And either would knock the share price for six, as I mentioned earlier this week (Beware! Rights issues could lose you money).

http://www.moneyweek.com/news-and-charts/economics/dont-be-tempted-by-life-assurers-14631.aspx

Bennifred

_pale_ _pale_ _pale_ _pale_ _pale_

sabretoothtigger

At least the 1.65 bit was right, eerie how its frozen there though pretty much. Its just picked up a bit


http://www.theherald.co.uk/business/news/display.var.2490485.0.Standard_Life_plays_down_unfair_tactics_claim_on_pensions.php

10:15 164.00p 319,498 £523,977 Buy UT

U.K. insurer Prudential PLC (PRU.LN) soared 11% Friday as it posted a 5% rise in new business sales for 2008 and announced a deal with Taiwan's China Life Insurance Co. (2823.TW).

Leading by far only a handful of FTSE risers - the others barely reaching 1% - Prudential said its financial position remained strong, with a capital surplus of GBP1.7 billion at end-December, up from GBP1.2 billion at end-September.
Still, the company also said it expects "a challenging year and for global financial markets to remain difficult," and while U.K. operations grew well, there was a slowdown in growth in Asia.

Prudential also announced that it was selling its Taiwan agency distribution operations and agency force to Taiwan's China Life Insurance Co. (2823.TW) for the nominal sum of NT$1, and would buy GBP45 million worth of new shares to be issued by the Taiwanese insurer.

Prudential is exiting direct-selling operations in Taiwan, one of the world's most competitive insurance markets, just as European regulators are implementing tougher accounting rules on capital reserves for insurers.

Prudential also said it will invest GBP45 million to purchase a 9.95% stake in China Life through a share placement.
"This agreement is enormously value-enhancing for Prudential Group on several levels. We release significant capital to further strengthen our already very robust capital position...we improve our embedded value," Prudential Group Chief Executive Mark Tucker said.

At 1200 GMT, the shares were up 28 pence to 284 pence, compared with a 4.3% decline in the FTSE General Financials sector index.

Prudential said that total new business sales last year on an annual premium equivalent basis, or APE, were GBP3.02 billion, up from GBP2.87 billion in 2007.
APE counts 100% of regular premium sales and 10% of the money earned from selling single-premium products.
U.K. sales rose 4% to GBP947 million, an improvement after hardly seeing any growth in 2007.

However, Prudential's Asian business is showing signs of slower growth. Until last year, new business sales from Asia had grown 25% on average over 14 years. In 2007 it was 37%.
Prudential said new business sales in Asia last year were up 6% at GBP1.36 billion, while U.S. sales grew 7% to GBP716 million.
Analysts said Prudential's sales figures were good and in line with forecasts.
Oriel Securities said Prudential's capability to boost its current capital surplus of GBP1.7 billion with another GBP1.4 billion in future is "good news as previously, the IGD (Insurance Group Directive) calculation ignored surplus capital within the group."
Panmure Gordon analyst Barrie Cornes said Prudential's decision to dispose of its agency distribution business in Taiwan would help "significantly" in raising surplus capital.

"Overall, we think that this is a good move. Prudential is still very committed to Asia and this disposal removes a thorn in the Asian business," Cornes said, keeping his buy rating and target price of 480 pence.
The company said that it has taken "a prudent approach to our 2009 plans, balancing new business with cash generation and capital conservation as our key drivers."

In a briefing, CEO Tucker wouldn't comment specifically on the company's interest in the Asian assets of American International Group Inc. (AIG).
"Around the world, we're being presented with many opportunities in the current market dislocation ... We'll see if it makes sense to our shareholders," Tucker said.
Company Web site: www.prudential.co.uk

Yorkshireman_3

Bennifred wrote: »

_pale_ _pale_ _pale_ _pale_ _pale_

Cheer up -- what is that old saying --- only believe 25% of what you read 50% of what you hear and 75% of what you see :beer:

Lopo

...and that 68.2% of statistics are often made up on the spot, and that only 41.1% of the population believe that statement to be true!

(citation needed of course!)




hehe!

sabretoothtigger

No reason to be depressed tbh, sl outperformed the ftse today and it held onto its previous support level.

If it goes through 165 it will be in free fall then you can break out weeping smileys

Pru went up 11% and L&G fell 7% but sl has funding and isnt tied to falling share prices, I dont know about bonds but I presume thats also hedged

Pru shows how important foreign earnings are I think. The market sucks, I cant see any reason for optimism in future personally

Yorkshireman_3

sabretoothtigger wrote: »

No reason to be depressed tbh, sl outperformed the ftse today and it held onto its previous support level.

If it goes through 165 it will be in free fall then you can break out weeping smileys

Pru went up 11% and L&G fell 7% but sl has funding and isnt tied to falling share prices, I dont know about bonds but I presume thats also hedged

Pru shows how important foreign earnings are I think. The market sucks, I cant see any reason for optimism in future personally

Course you can :d -- just believe hehehe - i did wht i said and bought some more shares -- cost me 1.76 each with commission --- still think it was a bargain --- will tell you when i sell them -- at a profit forever the optomist :d:j

sabretoothtigger

Ok, I was going to put a stake on some sl units at 1.65 but as always I hesitate, procrastinate and wait for a good deal to get better which means the timing gets worse.
Depends on the weekend news but I expect more of the same next week tbh, no big recovery or whatever but all the same, opportunties

Theres certainly a case for anyone to buy with a tight stop loss of about 1.63 I think. Buy and hold is not something I can really recommend in such an awful bear market and people seem to hate sl for some reason right now like L&G is some how a reflection of sl, I dont get that but maybe the results will prove them wrong, I wont pretend I know how these things really work.

At some point SL will have more money then the total cap of the company.
They will be able to literally buy themselves, I dont think they will but a share buyback, a scrip issue or a compensatory dividend even maybe which is the opposite of L&G