New book by Larry Connors Click here Improve your trading - See how
QBE describes itself as Australia's largest international nonlife insurer and reinsurer. PMI will also fund premiums of about $46.5 million to assist in procuring an excess-of-loss reinsurance cover for PMI Australia. The agreement provides for reinsurance profit-sharing for one-half of the reinsurance premiums at the end of the three-year policy life, PMI said.
The stock price for PMI (NYSE: PMI | Quote | Chart | News | PowerRating) jumped by 60.22% in morning trading on Aug. 14 to $4.49 a share.
PMI provides residential mortgage insurance. It said the acquisition will improve its ?overall liquidity and support opportunities? in the U.S. mortgage insurance market.
The price will consist of 80% cash and the rest in the form of an interest-paying note.
"This transaction is a strategic move that will benefit both companies," Steve Smith, PMI?s chairman and chief executive officer, said in a statement. "PMI Australia's customers will benefit from the financial strength, expertise, and operational excellence of QBE, and PMI Australia's employees will gain the scale and resources QBE will bring them to expand and grow their business in Australia.?
PMI has been affected by the U.S. mortgage crisis, which has been blamed on the industry?s dependence on subprime loans. During the first quarter of 2008, PMI reported a loss of $274 million, down from a profit of $102 million for the first three month of 2007. The group?s U.S. mortgage insurance activities produced a net loss of $172.5 million (BestWire, May 12, 2008).
In June, the Federal Home Loan Mortgage Corp. announced that it would continue to regard PMI and two of the other largest mortgage guaranty insurers as credit-worthy after they presented remediation plans. The FHLMC, popularly known as Freddie Mac, said all three had would be regarded as "Type I" insurers, which is below the AA level (BestWire, June 23, 2008).
QBE has also had its problems lately. In May, it gave up on an attempt to acquire rival Insurance Australia Group Ltd., pointing to the other company?s rejection of an improved offer. QBE said it would look at building a "pipeline of acquisitions" in other areas (BestWire, May 21, 2008).
(By Robert O'Connor, London editor)
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
15260 Ventura Blvd., Ste. 2200
Sherman Oaks, CA 91403
© Copyright 2009 The Connors Group, Inc.
