Equity Analysis /
Australia

AU : Financial Services - Others - Mark-to-market and sector earnings changes

    Steven Sassine
    Steven Sassine

    Research Associate

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    Richard Coles
    Richard Coles

    Financials - Equity Research

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    CGS-CIMB
    18 January 2021
    Published byCGS-CIMB

    We update our Insurance/Diversified Financials sector earnings on a mark-to-market and a broad review of our earnings assumptions. We see a broadly difficult reporting season for the Insurance/Diversified Financial stocks with headwinds existing from factors including lower bond yields, some insurance catastrophe activity and COVID-19 impacting activity levels provisioning (e.g. business interruption claims), etc. We make a range of earnings changes across our coverage universe (see full details overleaf). Our sector ADD calls are Z1P, QBE, CPU, MAI, KSL, MME and SUN (in order of preference). We move ASX from a REDUCE to a HOLD recommendation in this note.