schlechter ist es für den Kurs( was wir Anleger bestätigen können) , darum ist AIG. daran interessiert so schnell wie möglich seine Verbindlichkeiten abzutragen.
Now You Tell Us: UBS Finds Fault With AIG
ADVICE WOULD COST 94 CENTS ON THE DOLLAR
There’s something about American International Group (AIG) that UBS doesn’t like. The firm cut its rating on the stock to neutral from buy. That reversed a late-summer upgrade to the ”buy” rating that - for anybody who listened and took the long, painful ride down - would have wiped out 94% of the investment since the upgrade Aug. 5.
Which isn’t to say that UBS doesn’t have a point. The firm said that because of ongoing credit and equity market deterioration, capital pressures have prohibited competing insurers from purchasing AIG assets. True enough. As are the points that the current circumstances prevent the insurer from repaying the Fed loan, and dminish the prospective proceeds of asset sales. The point being: the longer AIG assets sit on the shelf, the faster their value deteriorates, meaning smaller sums recouped from that auction. Especially from the company’s commercial property and casualty business, talent is being poached and customers are being wooed away by rivals. And as credit spreads widen, collateral calls on the credit-default swap business AIG has written increases, forcing the company to lean harder on the Fed’s largesse, which - in one of those negative-feedback loops - boosts the need for more asset sales.
All isn’t lost where AIG is concerned, UBS said. When / if credit markets recover, asset sales could become easier to execute on. Nevertheless, the firm cut its price target on the stock to $1.70 a share. If it’s right, there’s seven cents of upside from Thursday’s close at $1.63.
To be fair to UBS, it’s not like the firm’s been all that constructive about the outlook for AIG, the upgrade to buy back in August notwithstanding. It had a $5 price target on the stock before lowering its forecast Friday. That doesn’t change the fact that the rating itself was a frankly fragrant call.
HARTFORD BACKS OFF PRICE-PER-DISAPPEARANCE
Apparently investors aren’t quite as convinced Friday that Hartford Financial Services (HIG) is headed for the slag-heap of failed financial services companies as those players seemed to be Thursday. Shares have recovered 35% from the all-time lows logged in Thursday’s intraday trading at just over $8. The stock has improved 10% Friday alone.
Conditions seemed a little more dire Thursday, when investors reacting to the company’s quarterly reports expressed their disappointment that management wouldn’t provide specifics about its capital adequacy. Those results came less than a month after the company raised $2.5 billion by selling a chunk of its common to Germany’s Allianz. Investors behaved as if they were hearing that Hartford still needed capital, and might have to consider an outright sale of the whole enterprise. Given the capital constraints and weak performance of the rest of the sector, the question of who - if anybody - might step up to buy certainly seemed like a good one to ask.
The credit markets never showed the same level of trepidation that the equities investors expressed. Sure, the credit default swaps for Hartford suggested some risk of bankruptcy, but never got to the dramatic levels associated with other financial firms that went belly-up this year, and never even approached the spreads commanded of rivals like Lincoln National (LNC) and Prudential (PRU).
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