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FINANCIAL CHRONICLE™ » CORPORATE CHRONICLE™ » Asian Alliance (AAIC) for sale

Asian Alliance (AAIC) for sale

+8
Meta Trader
MarketSIRA
GJ
milanka
Sandstorm
JennyFunny
mark
Monster
12 posters

Go down  Message [Page 1 of 1]

1Asian Alliance (AAIC) for sale Empty Asian Alliance (AAIC) for sale Sun Jun 05, 2011 12:11 am

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Asia Capital PLC, majority owners of Asian Alliance Insurance Company PLC (AAIC) is planning to sell its 73% stake in the company (held through connected parties) and exit the business, according to informed sources.

Already a large local conglomerate is said to be showing an interest in this company. Asia Capital has two other businesses - a stockbroking firm, Asia Securities and an asset management company called Asia Wealth Management.

“Asia Capital wants to concentrate on their core strengths, which is share broking and they want to sell AAIC at a total consideration of approximately Rs 4.5 billion (US$ 40 million). AAIC's issued capital is 37.5 million shares. The Richard Pieris Group, owned by Dr. Sena Yaddehige, has 25% in the company,” one source said.

Source: http://www.sundaytimes.lk/110605/BusinessTimes/bt09.html

2Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 12:34 am

mark

mark
Expert
Expert

oopps....it may be the reason for interest shown in last friday,as i remember in last week,a quite large order was executed at 130 level and share suddenly jumped up to 150 level and thereafter dragged down to 120 levels and saw some little interest.also this is in illiquid nature.

some facts about AAIC
http://forum.srilankaequity.com/t3970-aaic-some-facts#30042

lets see the Monday directions. Wink

3Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 12:44 am

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Not only that. Even ACAP suddenly dropped to Rs75.00 on Friday.

4Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 12:47 am

mark

mark
Expert
Expert

Monster wrote:Not only that. Even ACAP suddenly dropped to Rs75.00 on Friday.

oh, i just saw it...will monitor both on monday. Very Happy

5Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 12:55 am

JennyFunny


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

interesting piece of information..thanks for the upload..

6Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 12:58 am

Sandstorm

Sandstorm
Manager - Equity Analytics
Manager - Equity Analytics

If Asia Capital is expecting Rs 4.5bn for 73% of AAIC, this means asking price of AAIC is approximately Rs 170 per share. Year ended 31st December 2010, EPS of AAIC is Rs 13. Accordingly current PER is 13x times which is far below the market and banking sector PE. Also AAIC is a highly illiquid share with only 2% free float. Very interesting to watch Mondays reactions?

7Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 1:10 am

mark

mark
Expert
Expert

*Market price-130Rs
*EPS(2010/12/31)-13.73Rs (140% up by previous year)
*Profit for the year=368Mn
*NAV-41.62Rs (last year 20.72)
*ROC-55% (32% previous year)
*Price to book value-1.93
*RAM rating BBB- (from BB+)(company claims paying ability)

*Total investments-3.8Bn
>>composition
-government securities-2002Mn
-quoted shares-1159Mn
-debentures-310Mn
-term deposits and commercial papers-278Mn

*share volume-37.5Mn (after right issue)
*public holding before rights-2.11%
*public holding after right issue-1.70%

factors to consider
1.>they had a right issue(1 for 2) for value of 812.5Mn,so NAV will increase,and EPS will be diluted in this quarter accordingly

2.>one off gains(investment income)=693Mn(up by 77% from previous year)
(Investment income is likely to come under threat in the medium term given lower
returns on both equity and government securities)

3>underwriting result=332Mn (Up by 19%)

4>Net earned premium-(from life-1037Mn)-(from non life-277Mn)
(life segment account for 79% of total net premiums)

5>profit growth of some competitors competitors(YOY)
---CINS-1Q2011-EPS=10.84(group-up by 158%)-MV-650(voting)
-INVESTMENT-(32Bn)

---CTCE-1Q2011-EPS=4.92(up by 283%)-MV-310
-INVESTMENTS(22Bn)

*AAIC had a better financial year in 2010.


8Asian Alliance (AAIC) for sale Empty Asian Alliance for sale Sun Jun 05, 2011 8:11 am

milanka

milanka
Vice President - Equity Analytics
Vice President - Equity Analytics

Asia Capital PLC, majority owners of Asian Alliance Insurance Company PLC (AAIC) is planning to sell its 73% stake in the company (held through connected parties) and exit the business, according to informed sources.

Already a large local conglomerate is said to be showing an interest in this company. Asia Capital has two other businesses - a stockbroking firm, Asia Securities and an asset management company called Asia Wealth Management.

“Asia Capital wants to concentrate on their core strengths, which is share broking and they want to sell AAIC at a total consideration of approximately Rs 4.5 billion (US$ 40 million). AAIC's issued capital is 37.5 million shares. The Richard Pieris Group, owned by Dr. Sena Yaddehige, has 25% in the company,” one source said.
http://www.sundaytimes.lk/110605/BusinessTimes/bt09.html

http://forum.srilankaequity.com/u188

9Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 8:14 am

GJ


Manager - Equity Analytics
Manager - Equity Analytics

acap

is it good to buy at current price?

10Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 8:40 am

MarketSIRA


Senior Equity Analytic
Senior Equity Analytic

GJ wrote:acap
is it good to buy at current price?

Significant portion of AAIC is now owned by Fast Gain a Malaysian company owned by Gold Quest. They also own almost fully own Asia Capital. Read my old post.
http://forum.srilankaequity.com/t2960-asia-capital-acap-lose-control-of-asian-alliance-insurance-plc-aaic

Beside that Asia Capital is going through difficult times. They have appointed a new but relatively inexperienced CEO, Asia Securities their stock brokering company lost it's flagship client aucbach Grayson to TKS Securities and there had been an exodus of staff as many of the good stock brokers have been porched by competitors. Asia wealth management cost base has increased tremendously without any significant increase in revenue and the Asia Asset Finanace is still strugging to turn around and meet the statutory requirements of the Central Bank.

Agree with Gaja that from this sale Asia Capital will have a capital gain. But effect of the gain would comparatively low due to previous consolidation that need to be reversed Asia Capital and the fact that most fund will be utilized to meet the deficit that has arisen due to bad debts of Asia Sedurities.

Therefore I will go for Asian Alliance.

11Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 11:08 am

JennyFunny


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

thanks for the upload..

12Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 2:40 pm

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Looks like collecting more funds to do this and assist HNWI on the process
http://www.thesundayleader.lk/?p=40116

13Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 3:57 pm

mark

mark
Expert
Expert

Share holding as at 06/01/2011
Fast gain-24.26%
PABC/ACAP-22.40%
SEYB/Asia fort-13.07%
RICH-ACCT 01-12.51%
RICH-distributors-10%
Asia fort direct investment-9.90%
ACAP-3.58%
Wadlock mackenzie/RICH-2.50%

14Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 5:23 pm

duke


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

i think this is what every company should be doing these days, not only sell portfolio owned by them but send a message that they're going to sell themselves.

15Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 8:57 pm

cse.alpha


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

AAIC reported a profit of Rs 368 mn in 2010, up 154% from 2009. Investment income was main driver of strong results in 2010. Can it be sustained though ?

After a 1 for 2 rights @ Rs 65 (XR date : 25th Nov 2010) that raised Rs 812 mn, AAIC has 37.5 mn shares issued, but for EPS purposes, annual report has taken 26.8 mn shares for 2010, which gives 2010 EPS of Rs 13.7

The Rs 812 mn will contribute to earnings in 2011.

Need to check valuations against other insurers, but control always has a premium, and there are several potential buyers ranging from DIST to Softlogic, as well as other insurers.

AAIC increased exposure to quoted shares in 2010, and as at 31st Dec 2010 it had Rs 1.16 billlion market value investment in shares, with biggest exposures to RCL, TKYO, ACAP and HNB.x - as at 31st March 2011, it had increased stake in LWL to 10%.

AAIC is a very illiquid company, with promoters holding 98.3% of company, and only 10,000 shares needed to enter Top 20 shareholders as at 6th Jan 2011, so it is easy prey for manipulators, so be careful.

16Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Sun Jun 05, 2011 9:24 pm

kam2011


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

AAIC is an insurance Company engaged in insurance Underwriting. Since insurace business has lot of oppotunities to grow in our Country Underwriters too have very good chances to increase business and profitability.Therefore in my opinion if I want to enter in to this counter present price level is very attractive. Already I have some buying orders for tomorrow.

17Asian Alliance (AAIC) for sale Empty Re: Asian Alliance (AAIC) for sale Mon Jun 06, 2011 9:10 am

Hawk Eye

Hawk Eye
Expert
Expert

Just Read what Chairman/MD M.Nanayakkara of ACAP stated in last Financial Report

Since November 2009 the investment portfolio of Asian Alliance Insurance PLC has been managed by Asia Capital PLC, as we felt that the appropriate skills were already present at Asia Capital PLC., To quote investment Guru Warren Buffet whose company the fabled Berkshire Hathway, uses the insurance company geico as the corner stone of his investment strategy,explained why we invest in insurance companies is due to the privilege of managing their investment portfolios. The oft quoted sage of Nebraska Omaha, has written that the reason we invest in insurance companies is because it provides us the privilege of managing their investment portfolio. Somewhere on the way, this message had been lost to Asia Capital and on taking over as Chairman of the Group, I was shocked to discover that Asia Capital paid little or no attention to the Life or General Funds at Asian Alliance Insurance PLC.: Page 10 Annual report 2010

And read what they say now:
“Asia Capital wants to concentrate on their core strengths, which is share broking and they want to sell AAIC at a total consideration of approximately Rs 4.5 billion (US$ 40 million).http://www.sundaytimes.lk/110605/BusinessTimes/bt09.html

Somethings wrong with these people.

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