Member Info for Jatw

The future profitability of an insurance company is driven by changes in two very large numbers for assets and liabilities....the Solvency II regulations have forced a self assessment of how these numbers are modelled....but the truth is that the models are always wrong and no one knows by how much. They take a diversification benefit when risks are uncorrelated (but are they under extreme conditions?)
The solvency ratio published is an attempt to show how much extra the company has to accommodate changes in these numbers relative to a modelled likely worse case.
Management say they have good matching (hedging) of the assets and liabilities, but these are additional contracts of uncertain quality under stress.

My view is that management and regulators are willing to operate with significant model risks. This gives rise to uncertainty surrounding future prospects and hence the market has discounted the value of insurers and asset managers much harder in these unprecedented times.

We may think these companies are more valuable....and that maybe the case depending on future business conditions but they might also be worth less than currently priced.

Market has dribbled downwards....clearly not much excitement for this story.

Not worth looking at Aim in the morning, no volume and huge spreads.
HCM is about 120th by market size in the UK. It should be stepping up to the FTSE250....coverage and volumes would increase substantially. It would quickly be a FTSE100 stock, particularly in current market conditions as others fall below.

I am reinvesting the dividend for future returns as the Asian markets recover their poise.

BBD you may well be right....I expect the payout ratio will bite in 2020 and there may well be just one dividend declared with the FY results.
There is no point continuing to pay a yield of 10%+..... that just encourages investors to think the business is a utility and regulators to think they can squeeze more from the company.

Yesterday’s “research” was just a review of past research without any lab work.
Do you believe that J&J (listerine) or GSK (corsodyl) would have missed such an opportunity for their products......I would like to be proved wrong, but this is likely another false hope being offered to the public.
However it will cause all mouthwashes to sell out. A good viral story.

It is the LGEN AGM on 21 May and MNG on27 May. They have the market fretting about whether they should pay their dividends.
It is lose lose, pay the dividend and reduce liquidity/ capital, don’t pay the dividend and it seems you need a reason to keep the capital.
Atleast by acting early the AV BOD ended the uncertainty sooner and have not got the volatility the others have (MNG down about 15% in the last two days).

Jackson is almost too small for Berkshire....WB was talking about being able to do 30-40bn deals.....it seems Jackson is now sub 10bn and declining

Re surufatinib- There should certainly be a line of sight around the HY results, but H2 21 or early 22 would be a decent result.
I do wonder if they could Get suru straight to the reimbursement list....that would be of great patient benefit rather than waiting another year.
Savolitinib seems to be forever in further trials

Pru is highlighting that Business practices have been changing.....they need the regulators to be comfortable so that more efficient (online) sales practices can be implemented while protecting customers.
Pru is a major player and can leverage its footprint to develop and deliver innovative propositions.
In 5 years this will look like a blip in performance....whether it is the equivalent of 2 or 3 or more years of growth removed depends on how the virus is handled in the major markets.....we are all looking for a strong bounce later in the year and into next year. Forget about Q2 and Q3 poor sales are baked in.

Interesting commentary from CH as usual. Two stood out for me:
View that the current (mostly China)dataset would likely form the basis for Surufatinib to be submitted to FDA For approval.....so that should expedite global approvals...for all NETs.
He saw a clear route for Savo to be progressed to approval in PRCC cases based on OS from Savoir. Which is a revival/recoveryfrom their major disappointment (end 2017 or 18).

Next 2-3 years will be v interesting.....

Big fall in HK New business with a sizeable reduction in China. Rest of Asia flat.
Operating profit up 14% which is not bad.....reflecting good persistency.

Outlook for Q2. Stabilise Asia, slower US sales.

Cash result for H1 looking resilient because of back book.

Jackson to become more independent....announcement at HY results.
Business is difficult to value and realise that value in current conditions.....I continue to hold.

Additionally the company has outlined four papers for ASCO at the end of MAY.

Strong news flows coming. Historically this drives significant SP movements..

An updated corporate presentation dated May is available on the website.....and presumably for use in the coming conferences.
It seems savoir may be back on, Savo NDA seems to be moving on with a statement it has been submitted, but maybe not accepted yet.....second surufatinib NDA is in progress but still Q2

To paraphrase And when the world changes.....it is sensible to atleast consider changing your position.
In theory paying the dividend should make no difference to the SP. Not paying the dividend will worry the market.....but if the market is worrying about MNG the SP will fall anyway and it is lose lose...

Divi is a double edged sword
Pay it and hold co cash is reduced and solvency ratio decreases.

Don’t pay and the although the company is stronger than it would have been, the market worries about solvency and why it has not been paid. The shares are XD so a decision to withhold the dividend, particularly one that is now more than 10% of the value of the company should boost the share value.

If the BOard believes MNG can ride the coming recession without new capital it should pay the divi. Otherwise raise capital now if it s available.

I agree it is good to see new investors appear, but they have only invested $681k. Per the form which is searchable.
There should be many many more fund managers with stakes bigger than this.

Anyway....management will soon have some real news with 2 NDAs expected.....I wonder which of the 4 investor conferences will be blessed with an announcement?

But sometimes it is the right thing....
Reverse the life business into a consolidator such as Phoenix and distribute cash and Phoenix equity to SH.
Sell Canada and other life ops.
Become a great insurance business.

Good to see HCM make a strong showing on Friday. It is a shame that short term movements seem to be correlated with hints about US SINO relations. Trump is bound to have a “make China pay” reelection promise which will be a dampener on what promises to be a strong year for the company. Looking past trump the future is bright

Market is perhaps expecting a dividend cut for 2020 to bring payout into a 50-60% payout range. Remember 20% of fee income has disappeared and not all costs are variable so profits will be squeezed and taxes raised.
SP is most likely oversold being 50% down but may also be a new normal for a reduced dividend.