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1n Ch1na caused the pull 0ut 0f Zur1ch. £100,000000+ cla1ms. Unf0tunate t1m1ng. My keyb0ard 1 s fcuked.
Well, I do'n't know if my reasons for buying at 404p were compelling but Zurich said they had done normal diligence and found nothing worrying -- they just ran out of spare cash and pulled up the drawbridge. So the reasons for a takeover are still valid. Then there's the SP drop which , as usual, was overdone and will recover. Indeed, in a tanking market it is. Finally,some optimists have,today, bought over £6m worth of shares so my twopence worth is in good company.
These were doing b****r all prior to the Zurich interest and will settle back to where they were before the abortive TO. In the current market I cannot see any compelling reason to buy RSA at present and Hester is going to have to come up with something pretty dramatic to change that.
Perhaps not massive impact firvequities vs bonds and savings but there are other impacts to this eg movements from equites to forex. Also psychologically it is the prelude to further rate hikes which means that the market will start to forward sell in advance so the downward action will be amplified. Got a few months yet though I think and I still see a short term bounce here. I do hold a long position at 406.4
I hope you're right about the rally to 437, and I agree about the market overreacting yesterday. It always does - most sudden big drops are followed by a bounce. I don't agree about the rate rise damping down equities anymore. What rate rise are we talking about here - maybe 25 pips to 0.75 per cent? Do we really think that's going to drive cash out of equities yielding 2-3 per cent and finally coming out of seven years of tough times. On the contrary I think a rate rise shows the B of E is confident about future growth prospects.
That may have been the MMs' logic for that opening price yesterday and the market is understandably cautious... Without a rate rise till late Autumn/Winter there is still scope for rallies and I can't see it being very difficult to squeeze five per cent long from here as a minimum. Ask don't forget the market is the sum of its parts and not vice versa, so in its own right I still see 437+ short term: the market always overreacts.
I'm not a chartist but if you look at the RSA graph the equivalent high over the last five years is around 700 (140 in pre consolidation terms) which was almost five years ago. Since then we've been in a slow but steady decline, especially since the one for five consolidation. The truth is investor loyalty was bought not because of growth prospects but because of the dividend, which proved unsustainable. I bought because thought Hester might turn it around. His last results were promising but I think we have to wait till the next results to see if real improvement is on the cards. Insurance stocks are like put options - great when not much happens but there's always a sudden downside risk. But if I had any spare cash right now I'd be topping up here.
But hasn't the market also fallen by that amount since pre offer hence the extra drop.
Don't disagree with anything you said but just from a technical viewpoint the share has fallen to below the pre offer SP, which was 437ish... At 403 there is a technical gap fill up the long side to that level with is a pretty solid buy trade for those looking short term.
The problem with RSA is that it cancelled its strong dividend last year and reinstated it this year with half percent yield payout. That's not going to attract new institutional investors to the RSA story just yet. Hester still has his work cut out selling off dud assets, re-building the balance sheet and driving in cash to increase the divvi. The Zurich interlude will have been a distraction. All we've done today is to drop back to pre-Zurich levels from where nothing has changed. There may be a climb from here but new investors are going to need a new story.
Have a look what happened when that takeover fell through... Very oversold should be able to make a quick 5-10%
oes this lack of a deal mean that RSA is in trouble or was it just an opportunity for a bigger comapny to buy out a well run competitor. if the former then don't touch it with a barge pole if the latter might i suggest filling your boots because it is a well run company [which may or may be the subject of another take-over bid]. I don't hold, i sold out a while back at 114p[although at a very small profit not one of my better moves]. just debating whether to re-take the plunge.
Where are you now?
Terminated discussions on offer due to Zurichs own poor performance
gee
Hester is on course to turn the Company's fortunes as highlighted by Directors. seems unlikely they will allow Zurich to buy below 550. There may well be another bidder, possibly Prudential who may still trump it
Looks like they are hoping to buy RSA cheaper if the market goes belly up again...lol
Sorry guys I was not very clear. Zurich said shareholders can keep the dividend of 3.5p and there is an agreed extension to 22/9 as meopre stated for Zurich to make a firm offer
I believe T/O has moved to 22nd, if it goes ahead
I thought they had promised the 3.5p to existing shareholders in addition to the 550p. The timescale for a takeover of 10/9/15 seems a bit tight...
Interested by your last post. had been wondering if Zurich would try and complete purchase by 10.09 ex div day and retain interim div. I take it they do have to own the shares then to keep the div?
Zurich notified RSA of possible revised all cash offer of 550p and the right to retain the interim dividend of 3.5p
RSA - The only riser in the FTT100 today. Does somebody know something we don't?
My bet is an agreed extension to the dead line.
SLEEP