Insurers under Pressure, but British Airways Takes Off

International retail financial services company, Prudential, continued its downward spiral on Tuesday afternoon closing down a further 42.5p or 8.02% at 487.5p, as investors continued to shy away from its £23 billion deal to buy American International Assurance (AIA), the far eastern business of American International Group (AIG). Investors were concerned that not only was Prudential overpaying for the deal, but that the record £14 billion cash call required for its completion would dilute existing shareholdings.

Dominic Turner
shareprices.com - Tuesday, March 02, 2010

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British Airways

Car insurer Admiral also fared badly closing down 42p or 3.32% at 1,223p, despite reporting record profits and sales for 2009. Admiral, which also owns the Confused and Elephant brands, posted pre-tax profits of £215.8 million, up 7%, but Chief Executive Henry Engelhardt warned that conditions would remain challenging this year in light of increased personal injury claims and competition in the marketplace.

At the other end of the market, embattled airline British Airways, which faces the prospect of strike action by cabin crew, found favour with investors, rising 13.1p or 6.17% to 225.5p, after its rivals, Lufthansa and Continental, posted better than expected results and the International Air Transport Association (IATA) reported that passenger demand in January increased 6.4% year-on-year.

There was speculation over the pre-tax profits of Standard Chartered ahead of their release on Wednesday; the market expected the bank to report pre-tax profits of $5.1 billion, with EPS, or "Earnings Per Share", falling to somewhere between $1.52 and $1.80. Standard Chartered's share price closed up 64.5p or 4.23% at 1,590p.

 

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