AIA shares rise to record high after strong results
AIA, the second-largest Asia-based insurer by market value, saw its shares rise to a record in Hong Kong yesterday after its value of new business climbed a stronger-than-expected 26 per cent in the third quarter.
AIA, the second-largest Asia-based insurer by market value, saw its shares rise to a record in Hong Kong yesterday after its value of new business climbed a stronger-than-expected 26 per cent in the third quarter.
The insurer added 4.43 per cent to close at HK$40.05, the highest level since it started trading in October 2010.
AIA's new business value, measuring projected future profitability of new policies, increased to a record US$379 million from a year earlier, the Hong Kong-based company said in a statement to stock exchange yesterday. The growth beat the consensus estimate of about 20 per cent, according to a Credit Suisse research note yesterday.
Credit Suisse analysts Arjan van Veen and Frances Deng raised the insurer's earnings estimate this year by 9 per cent, citing "subsiding macro headwinds in the last couple of months".
AIA has sustained a quarterly rise of more than 20 per cent in new business value even as currencies in several of its major markets depreciated against the US dollar amid anticipation of a reduction of monetary stimulus in the United States. The insurer sells policies in local currencies and reports its financial results in US dollars.
"Debate over the timing of supportive US monetary policy caused capital market volatility in the third quarter and tested those countries running current-account deficits," AIA said in the statement. "Asian central banks responded appropriately."
Larger regional economies were benefiting from a shift towards domestic sources of growth and the more trade-dependent markets would benefit from a pickup in global trade as a result of an improved outlook in China and Japan, AIA said.
Depreciating Southeast Asian currencies might moderate AIA's new business value growth over the short term, Goldman Sachs analysts Mancy Sun and Yao Lu wrote in an October 16 report.
