Member Info for Jatw

Market is probably still lacking trust in management to get this over the line with the FDA etc. and will need to wait until q1 2024 to know the result….the numbers of patients looks huge but this is a crowded market with new drugs emerging….so how much can Fruquntinib grab and for how long are difficult to forecast….but it is growing market share in China which is encouraging.

Seems the FT is hedging its bets…..predict enough outcomes and eventually you will get one right….
Could they both be right? If the business is at a turning point now is the time for a predator to swoop in and pocket the upside….not holding my breath or betting my house on that happening.

Good for management to front up with the lead investigators to talk about just how good Fruquintinib is.
While Overall survival is the primary end point, if I were a patient progression free survival time is what I would want to gain and be willing to pay for….and what will drive sales….

Let’s hope that is a good number too.

Not that the market seems that interested at the moment.

The original article said NWG was reviewing a number of potential targets.
We should expect this activity…..and QLT will do the same, but perhaps on a smaller scale.

We don’t know QLTs Directors attitude towards M&A. The placing of a story may have been to try to force them to the table/ put them in play……anyway the post results holiday period is nearly over and with a recession likely M&A will be playing on Board minds, do they need a rescue? Do they want to bulk up to avoid being prey? Do they want to lead a consolidation?

There will be deals in the next year…..the UK markets for asset and wealth management are very fragmented…..and can take many consolidation deals before the CMA gets involved….but don’t count on cash bids with large premiums arising. Consolidation between the £bn companies are more likely to be all share deals with promising of cost cuts and capital releases driving higher future shareholder returns.

V limited effect I am afraid unless a realistic bidder is betrayed by their bankers.
However it may make MNG directors more open to larger M&A. Bulking up with some smaller asset managers and distributors could make them less enticing…..all share deals with the likes of JUP or QLT among others might be possible and the premium not prohibitively large. Cost savings from cutting back office plus rationalising funds and closing under performers could make for compelling transactions….that is what usually happens in recessions when the weaker players need to cosy up to a larger neighbour or face a sharp drop in profitability and value…..making a bigger UK asset/wealth manager might be preferable to joining a bank or a US operation.

And they raise funds by selling their growth asset in India, now reduced to a 10% holding. Other than a ready source of funding I don’t understand the logic of selling part of the group that is growing and expected to grow in the future.

Advances in breast cancer and prostate cancer recently announced.
The oncology franchise is growing and seems to be advancing rapidly…innovation is good for patients. Price controls (except only older drugs) will overall be adverse for populations….better to reward new drugs and as better alternatives emerge force the price of superseded less effective drugs down.

Sorry Robleo it was read out to me. The gist was the structure with an asset manager and life assurer is no longer fit for purpose.
There were quotes for analysts calling for a break up by the next CEO.
Suggestions to sell the annuity business.
culture issues were rehashed even though they were pre pandemic.

The new CEO will set the course with the recently installed chairman….in the meantime the end of the current management team does create an opportunity for a bidder…..maybe the Saudis have built stakes to bang heads together at Phoenix and Schroders to orchestrate a carve up of MNG?

Good old trashing in the FT.

Think you will do ok with this spikeyj.
Todays accelerated approval of enhertu is a big win……an extra phase 3 trial could take the best part of two to three years to execute and then get FDA approval….so there is good revenue gain and more importantly hope for relevant patients…….

I very much doubt there will be much gain from reforming solvency II…..the pra has already said that solvency II being based on a one year model of risk does not take account of the climate change risk adequately and they are considering whether another capital regime might be needed……the treasury may give with one hand but the regulators will take it away and more with the other……while I am supportive of improving the environment I do think regulators need to be careful to not create a monster of a capital model that will produce spurious results.

If NWG is still interested the lacklustre reaction to the HY results suggests a lower offer price around 140p may be sufficient.

Market reaction says “come and get me” to NWG…..yours for a bargain 140p….

Well received numbers looking like a significant bounce back….will the share price respond??

If it does double it is likely to be in a couple of large jumps rather than a rising trend……

Still does not seem to be much interest based on volumes hence the sideways share price and failure to hold on to gains that do arise.

Market is voting up today, looking at fund flows showing the business is growing and the promise of growth through Wealth Management and promoting PruFund and variants in new markets. Mr Market also likes the capital position dividend position and continuing buy back programme.
Next 12m the sp will broadly track the UK markets and economy, medium term growth aspirations should result in modest outperformance……
Dividend provides some relief if there is a downward lurch…Hold

Looking across a number of companies it is the tone in the announcement that really distinguishes how the market has responded. Quilter struck a cautious/negative tone which has hurt them relative to others……overly pessimistic in my view…

IFRS requires assets to be revalued using market values where available and market consistent value where there is no market. Insurers carry assets to back liabilities and have to have further assets to ensure their ability to pay claims under adverse conditions.
The asset values are volatile and the unrealised gains and losses go through the P&L.
The solvency II capital position shows how these assets relative to the assessed liabilities which also move because of the interest rate used to discount them as they fall over the next 20+ years for annuities.
The IFRS result recognises there is a loss of value….which if the business were wound up would be crystallised….but we can view that as somewhat transient, asset prices may recover in future but they are not something the management can influence much hence they focus on operating profit before these economic and market movements.
The capital position is critical, as regulators have to approve dividends and capital returns, they can also require recapitalisation if the solvency capital ratio falls too low. For MNG and SCR of 160-180% would be the expected operating range, so the capital position is strong which indicates the dividend is supported for the time being.

Others may care to add…

AUM down, but not as much as others…..net client cash flow for open business is positive, at first glance the heritage outflow was not clear, but should be in line with expected policy maturities.
Solvency remains strong, dividend up and benefitting from buy back which can now resume at full throttle…
Positive notes about M&G Wealth.
And a whopping IFRS loss of 1bn. Can’t see the market liking this aspect, it’s size is worrisome.

BTW The term wholesale funds refers to funds sold to retail customers by third parties (ie what we can buy from platforms like HL, AJB, etc), what they provide to banks/ pension schemes are called institutional funds.

Pru may not be considered too large by PRC and it will gradually be owned by HK and other Asian funds. It has arguably done the hard work separating its Asian and African arms from US and European businesses….it now needs to transition its financing to the east and appoint local senior management and directors…Pru is a decade behind AIA in being a non Chinese Asian insurer with a western heritage, but they are both facing the same geopolitical issues at present. Watch what AIA does…..and maybe there should be a rebrand to create an Asian identity.

..I think the pace of change in its shareholder base will surprise us