Corporates swoop on QBE shares
Corporate buyers have swooped on QBE stock that was beaten down by jittery investors after the insurer’s net profit fell 6% short of analysts’ expectations in February.
Last month British banking giant Barclays Group acquired almost 45.5 million shares in QBE, equivalent to over 5% of the total shareholding.
Another buyer is Commonwealth Bank-owned superannuation and investment provider Colonial First State Investments, which has recently bought 1.8 million shares to take its total shareholding to 44.5 million shares.
QBE’s share price has fallen significantly since trading above $30 just a few months ago. This morning it was trading at $25.19.
KPMG analyst Andries Terblanche says investors may view insurance companies as a hedge against current market volatility.
“Insurers are exposed to acts of god, and not so much to mainstream risk such as the subprime situation,” he said.
Significant cash reserves held by insurers could also be attractive to corporate investors. Mr Terblanche says acquisition activity is especially prevalent in the insurance sector.
Last month British banking giant Barclays Group acquired almost 45.5 million shares in QBE, equivalent to over 5% of the total shareholding.
Another buyer is Commonwealth Bank-owned superannuation and investment provider Colonial First State Investments, which has recently bought 1.8 million shares to take its total shareholding to 44.5 million shares.
QBE’s share price has fallen significantly since trading above $30 just a few months ago. This morning it was trading at $25.19.
KPMG analyst Andries Terblanche says investors may view insurance companies as a hedge against current market volatility.
“Insurers are exposed to acts of god, and not so much to mainstream risk such as the subprime situation,” he said.
Significant cash reserves held by insurers could also be attractive to corporate investors. Mr Terblanche says acquisition activity is especially prevalent in the insurance sector.