The current aviva business is now radically different from 5 years ago so a lot of comparisons are not realistic. Since the new look aviva all results have been strong performances. I believe this is a share that has turned its fortunes around but hampered by market sentiment - in any case a 30p divi that looks strong would make a case for buying for most.
Chid, that’s true for banks but virtually impossible for aviva. High claims will be covered by reinsurance and they’re sat on plenty of excess cash. Higher rates are good for aviva. Hard to see why this is one of the worst affected ftse100 shares.
What a surprise. I suspected (as did many others) that the offer was fraudulent to buy the company time. However now announcing the offer was 40p seems strange. I personally bought in with an average around 43 so this price would be a reasonable exit for me however I feel that there is more value in the company, although this is purely conjecture with the lack of information we have. If Bluestar are actually serious they should’ve increased their offer. A typical takeover would usually have a 20% premium to the share price and with the bad news flow I suspect this would be a steal with proper management. 50p and surely the board would be more inclined to seriously engage - or has there been EXTREME levels of fraud and deceit and the company is worthless? Seems hard to imagine but anything is possible in this web of lies, surely the auditors have to be held to account if this is the case. How can it be that a short seller is the first to notice something is awry when the auditor has unfettered access to the accounts??
I think there's a capital raise on the cards here. The solvency ratio had dropped below their requirements therefore needing the 10% quota share. With the rating they'll be trying to put through there should be a big drop in revenue compounded with the 10% lost through reinsurance, I suspect this will worsen their cash position while continuing to play claims with lower premiums received. The reinsurance market has also been very hard this year and expect the XoL reinsurance to not be as comprehensive as previous years. I can't imagine the picture being any better than the January results so expecting sub 140 plus further drops due to the need to raise capital.
I take no faith whatsoever in any action of an auditor. There’s a reason why they are fined continuously - it wouldn’t surprise me if they barely even audited the numbers and are beginning their work from scratch.
Justthisonce, seems like a strange play to me. The share price is bound to drop by the div amount and there will be lots of volatility. I’m personally holding to suspension in the hope that everything gets cleared up and I make a tidy profit on readmission. We’ll see how it plays out!
My understanding is that when insurers use gilt for matching cash flows they always hold to maturity, this means fluctuating prices has no impact unless they are forced into selling to meet margin calls.
I believe all of Aviva’s schemes would be fully funded as part of the buyout process and therefore unlikely to be using leverage for LDI. This is why LGEN is unaffected.
I almost get the feeling Amanda’s long term goal is to get Aviva sold to private equity. It would certainly net her a few £.
Those graph charts have been amended to reflect the market cap. As there are now 76/100 shares that there used to be if you keep the number of shares consistent then the recent price of 440 for example needs to be multiplied by 100/76 which would give you the £5.80 you see.
The alternative options - special dividend, taxed as income tax and therefore likely to be higher in tax. I believe the b share redemption will be CGT but not applicable to me so I’m not certain.
Or they could have done a larger share buyback, however this is always criticised as not making much impact.
I’m personally quite happy for this method especially considering a share consolidation tends to lead to a drop in share price from those who don’t understand what’s happening. Great opportunity to buy more ahead of Wednesday’s results which I expect will send the price back to the mid £4 when investors see that the EPS has gone up due to there being less shares.
It is effectively a buyback that puts cash in all shareholders hands. It is also cheaper to implement so more cash finds it’s way to shareholders. The 25% reduction in shares is illustrative so any share price movements will affect the ratio they use.
Clark, it’s a tough one interest rates need to keep rising to try to prevent it but the entire country is so leveraged I’m not sure if interest rates will be able to reach the required level to stop stagflation without forcing defaults on mortgages. The rising interest rate environment should benefit insurers and banks though which is where I’m most heavily invested so no reallocation for me.
Clark, I don’t ever write any options. I find the risk is too high on them for my liking and constructing intricate risk managed positions (iron condor etc) is playing into the brokers hands by growing your trading fee massively.
Spikey I agree that spreadbets can be a very slippery slope, I sleep very well at night knowing an option won’t margin call me. I still use them as a very small part to compliment my isa so no huge amounts of money regardless.
Clark, I’m hoping a divi would cause a nice run up to expiry but will investors be that tempted to buy knowing that the share price will just drop by the amount of the divi on payment date? As awful as some buybacks have been I think this could be the right timing for it for Aviva as they have such a good regular divi pot anyway. A further £3b buyback would reduce the share number by about 25% (compared to last year) so the old 30p annual yield should become 40p ignoring organic growth. Put that at 7% yield and that’s an SP of £5.70 - anything close to that and I’ll be happy.
In terms of where; I use Saxo, not sure if there are any better brokers out there or not.
It’s an option to buy them at the strike price. It’s probably cost about 5p/share. At expiry they’re either worthless or if aviva is over the strike then you end up with a lot more leverage. I’m sitting on some March 440 calls so hoping to see them announce a big capital return by way of buybacks rather than dividends.
Ah yes, of course, the share price going up makes shorts money. You’re a special kind of stupid aren’t you?
Can’t believe this hasn’t taken off with how much oil has risen. The spike quickly disappeared, I expect this to be a slow burn of 1-2% a day to get us there.
Hopefully when dividends are announced it will put a floor in, I expect by December they will stop paying down additional debt as the gearing will be reasonable then. My very rough calculations would expect 30p dividend for the full year is very feasible.
Why fight it? Only because Argentina have absolutely no case. The only time the falklands has been theirs in the last 100 years was for about 3 months.