Aviva Share Discussion Threads

[spud] 19/11/2019 11:21

Aviva narrows list of potential Asian disposals

UK insurer plans to hang on to its businesses in Singapore and China


Aviva has decided to keep hold of its operations in China and Singapore, narrowing down the range of its potential disposals in Asia to operations in Hong Kong, Vietnam and Indonesia.

The UK-based insurer in August hoisted a “for sale” sign over its Asian assets, saying at the time that it was “considering a range of options to help these businesses reach their potential.”

News of the change of heart in Asia comes just days before Maurice Tulloch, who become Aviva’s chief executive in March this year, unveils more details of his strategy at an investor day in London. The Asian operations as a whole made profits of £152m in the first half, about a tenth of the group total.

Paul De’Ath, an analyst at Shore Capital, said: “Many investors and analysts assumed that at least some of the entities would be sold and the group would be able to use the sale proceeds to pay down debt or give capital back to shareholders.”

Shares in Aviva dropped 5 per cent on Monday in response to the news.

Singapore is the group’s biggest business in the region. The life insurance operation in the country generated £54m of profits in the first half of the year and pays dividends to group head office in London.

The business in China is run as a joint venture with Cofco, a state-owned food production company. It is smaller than the Singapore business but the market in the country is growing rapidly as demand for life insurance increases.

Aviva has radically restructured its Hong Kong unit over the past two years, turning it into a joint venture with Tencent and Hillhouse Capital focusing on selling life insurance directly to customers online. The Hong Kong insurance market has traditionally been dominated by advisers but the joint venture, called Blue, believes it can cut costs and win market share by appealing directly to buyers.

Mr Tulloch has already promised to cut £300m of costs a year in a plan that will involve the loss of 1,800 jobs. He has also promised to run the two big parts of the UK business — life insurance and general insurance — as separate operations and he has made a raft of senior appointments.

The investor day on Wednesday is expected to focus on firm financial targets, and Mr Tulloch’s plans for the dividend.

“We expect a strong focus on costs as this is key to the future of the business,” said Mr De’Ath. “We would expect some more detailed analysis of where and when these savings will be made.”

spud

[danielbird193] 19/11/2019 10:10

And here comes the bounce!

[skinny] 19/11/2019 10:04

UBS Buy 424.70 490.00 Unchanged

[klotzak] 19/11/2019 09:28

I'm glad I got back in yesterday. I have managed to sell and buy at the peak and trough. No idea what to do next though, as the divi payment is yonks away.

[skinny] 19/11/2019 09:05

Well that went well :-)

[alan@bj] 18/11/2019 17:19

Investors Chronicle's view:-
Investors tend to get excited whenever companies explore “strategic options” for cash-generating assets. After all, capital returns and solid external validation are always welcome. But in this case, shareholders have had very limited information to base any excitement on, and should wait for further detail at the capital markets day. At 417p, we remain buyers of the shares (497p, 9 Aug 2018), which offer a progressive dividend and are backed by a strong balance sheet.

[essentialinvestor] 18/11/2019 16:35

What's a ...distorted W ?.meaning another leg down ?.

[damanko] 18/11/2019 16:33

Spud,

I've always liked the (very) long term performance/share price graph on the Legal & General thread. Any chance the next time you're in editing mode, you could add something broadly similar to the header here?

If you can, thanks and regards.

damanko

[edmundshaw] 18/11/2019 16:21

No share is perfect.

But Phoenix and Legal & General seemed pretty good when the price dropped during Brexit uncertainty... Aviva was cheap too, and still seems so (as does Phoenix).

[whatsup32] 18/11/2019 16:11

5% drop seems overdone. Just don’t see the bad news in the rns
Perfect share to hold in uncertain times

[yf23_1] 18/11/2019 16:00

Going on the chart, its a bit predictable that the retrace to the previous tops would elicit some profit taking, and the RNS has just made that easier.
Happy with them keeping the Asian ops, I'm just pondering whether to top up or not.

[fizzypop] 18/11/2019 13:56

Looks like the confirmation of the low is in at 414p with a rather distorted W on the chart. But DYOR as I may have it wrong. Good luck anyway.

[essentialinvestor] 18/11/2019 13:09

Anticipated picking up a few PRU lower down this morning,
did not happen. Even with the deteriorating Hong Kong outlook.

Perhaps not the best time for Aviva to sell a HK business.

[woodhawk] 18/11/2019 13:05

Fizzy, if so I'd be tempted to take more.

[eurofox] 18/11/2019 12:59

fizzypop,

good

[eeza] 18/11/2019 12:55

That's how I read it also.

[essentialinvestor] 18/11/2019 12:48

Let's translate today's RNS - we did not get offers anywhere near
those previously mentiond in the press.

Not that Aviva would have been responsible for those articles and valuations mentioned, eh )

[fizzypop] 18/11/2019 12:48

Hi Woody - fair enough but have a suspicion its got further to fall.

[woodhawk] 18/11/2019 12:24

I was looking for a re-entry, Fizzy, so the fall has served me well this morning.

[eurofox] 18/11/2019 12:12

also added

[fizzypop] 18/11/2019 12:12

Guess I can't get too excited over a 5% fall this morning but it does appear to be bouncing back from 413p.

[skinny] 18/11/2019 12:11

I've added this morning - its been a while...