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nosolution
20-10-2008, 03:56 PM
Hey guys,

What do you think of tower's current share price? It seems to me that they are a large, stable, insurance company with minimal debt that ought to be trading well upwards of $2/share. I can't see why their price has dropped so drastically over the last few months. There's been no real changes or affects to their business that I can see. So what would have driven this dive in their price? Ripe for picking? Your thought?

Cheers,
Noso

winner69
20-10-2008, 04:49 PM
nosolution ..... where does most of Towers earnings come from?

Answer that question and than you can understand why TWR (and others) shareprice is being 'beaten to hell'

Have a look back to what happened to the likes of TWR when the sharemarkets collapsed post 9/11 ... get the picture.

Tower say they have learned from past experiences and their investments are safer now .... but you never know

peat
20-10-2008, 07:15 PM
risk a bit out of fashion right now perhaps

GPG out a few months ago. sold their hundred million at NZ$4.81 from what I read
http://www.nbr.co.nz/article/gpg-dumps-tower-stake-33824

nice exit!

macduffy
20-10-2008, 07:21 PM
risk a bit out of fashion right now perhaps

GPG out a few months ago. sold their hundred million at NZ$4.81 from what I read
http://www.nbr.co.nz/article/gpg-dumps-tower-stake-33824

nice exit!

That was Tower Australia. GPG still holding their stake in Tower New Zealand - TWR.

peat
20-10-2008, 07:28 PM
thanks for correcting me there macduffy.
the numbers didnt seem to quite match!

nosolution
20-10-2008, 08:23 PM
Volume is up quite a bit since the 9th. Looks like there are a number of people who think it might be the bottom... It'll be interesting to see what happens over the next few days.

AMR
20-10-2008, 08:45 PM
Chart looking fugly...will look at it again near the 1.10-1.20 mark...

nosolution
21-10-2008, 07:38 PM
So I'd just like to point out that tower went up 7.5% today.... I should have trusted my instincts. Haha, na 'cause if I had purchased, I'm sure it would have gone down. And we don't want to trade on instincts; we want to trade on sound decisions based on quality analysis, whether that be technical or fundamental.

Snow Leopard
21-11-2008, 09:57 AM
try this (http://stocknessmonster.com/news-item?S=TWR&E=ASX&N=530565)

regards
Paper Tiger

biker
21-11-2008, 12:50 PM
Thanks PT.

The NZX is very annoying - still nothing but the NZ Herald has a report and Direct Borking has an annoucement that can't be seen for another 13 minutes!

Grrr ... Somebody needs to sort out their technologies !!!

Just the NZX pushing their own barrow. Instead of a phone call to TWR telling them to present the results in a form that can be published directly instead of an attachment, they leave it as only accessable through their web site, for which you must register.
Typical NZX arrogance.

macduffy
21-11-2008, 07:59 PM
Must say that the increased dividend of 8cps was a pleasant surprise. A couple of years ago I'd almost given up Tower as a bad job, made the old NZ Govt Life look almost sexy!
So well done - a little light amid the gloom.

:)

JBmurc
17-12-2008, 12:48 PM
so has TWR paid its divie yet use ASB sec for my NZX trading which is crap compared to my ASX e*trade platform

scamper
17-12-2008, 02:32 PM
hi jb
the divi isn't due til 9 feb 09, and i couldn't find any reference to a record date.
the direct broking site doesn't have details either -- probably tower's fault.
the fully imputed 8 cps is good though.
i searched for the company's website... cheers.

Hoop
19-01-2009, 10:30 AM
hi jb
the divi isn't due til 9 feb 09, and i couldn't find any reference to a record date.
the direct broking site doesn't have details either -- probably tower's fault.
the fully imputed 8 cps is good though.
i searched for the company's website... cheers.

Ex-Div Date Monday 26 January 2009

outspoken
07-02-2009, 09:20 AM
I heard through the grapevine that Tower has just signed a deal to provide underwriting/insurance to dedicated Kiwibank Wealth Advisors. Small start but could be a big deal.
The banks do cream it off the insurance Co's
Most insurance companies pay brokers 90-100% of annual premium for life products as a base and anywhere from 30- 160% override commission depending how much business the broker writes with them. The banks write the most business by far and are therefore on the very highest of override.
This is all paid upfront first month or the broker can elect to have it paid as earned.
This is of course all writebackable if the business falls over within certain time limits (usually starting at 100% writeback before 12 mths and decreasing by 10% every month thereafter)
So in some cases a policy has to be in full force over 2 years before the insurance co makes any money off the Client. (notwithstanding what the ins co has done with the money to generate a return)

I like Tower as a Company, they have a good market presence and they are very competitive in the 50-60 age group for insurance

The GrandMaster
09-02-2009, 09:36 AM
The relationship with ANZ National had with Tower was only for General Insurance (e.g. House, Contents, Car, Travel, etc) - and the commission received for selling those is two-tenths of bugger all. So I don't think there was any creaming of anything going on.

moimoi
17-03-2009, 05:37 PM
TWR is being valued at a few cents below NTA again. Am I missing something?

I would have though the court decision to allow TWR to seek renewal of policies from ANZ customers would been positive ... even if, as the GM points out above, it was 2/10 of bugger all ;)

Perhaps because ANZ also has approval to market to the client base to retain them. I would suspect the majority of customers would rather continue to retain their "ANZ insurance cover" rather than shift over to a Tower Product involving a possible change of policy and direct debit etc.

ratkin
26-03-2009, 01:23 PM
Am considering an investment , any objections at 1.30?

From what i see the ANZ stuff well and truly priced in , gearing is low at around 17% and they have just completed a capital raising , so no debt worries till 2014.

Profitable buisness at a good price , or am i missing something?

biker
26-03-2009, 02:34 PM
No objection from me. I have these and have bought more at 131/132

scamper
27-03-2009, 07:59 AM
Charts look poor, but with nta =132.98, p/e 6.1, div 6.1, now seems ok for the brave...

Contrarian
27-03-2009, 08:45 AM
Gidday

I was reading a Buffett quote the other day (I'm sure it was him) & when the pe & yield are both 7 it's load up time, apparently only happens about twice in a life time,Shades of Halleys Comet!

I know we aren't USA & they mean yield has risen all the way up to 7%, while we wouldn't see anything strange about 7%, but this is a Buffett type business, Insurance.

Contrarian
31-03-2009, 05:33 PM
Gidday B

Cast your mind back 11 months... See the cut from May 08 below.

GPG cashed out of MYOB, GPG have long coveted TWR, remember the demutualisation, Tyndall, James Boozanier etc...
GPG have their capital notes cash just sitting there, The front page of the prospectus at the time had Ron saying something about having the cash sorted before the opportunities come up.


Guinness Peat Group plc ("GPG") has advised that a wholly-owned subsidiary,
GPG Twenty One Limited, intends to make a partial offer under the New Zealand
Takeovers Code to purchase 15.30% of the ordinary shares in TOWER Limited
("TOWER") at a price of $2.30 per share. GPG currently controls, through a
wholly-owned subsidiary, 19.70% of TOWER.

The offer will provide TOWER shareholders an opportunity to sell their shares
at a price that is a 11.1% premium to the last TOWER closing price and a
16.3% premium to the 1 month volume weighted average price.

GPG Executive Director Tony Gibbs said "from GPG's perspective, as a result
of the spinoffs of Tower Australia Group Limited and Australian Wealth
Management Limited, GPG's investment in TOWER had reduced considerably in
size. The offer would give GPG the ability to invest more money in TOWER and
increase the value of its investment back up to a more optimal investment
size more consistent with other investments in its portfolio."

Sehnsucht888
01-04-2009, 07:47 AM
Sigh.... Those were the days.

"The Board does not recommend that shareholders accept the offer at a price of
NZ$2.30 per share.

While the price represents a premium on recent trading history of TOWER
shares, it does not fall within the valuation range of $2.45 - $2.89 provided
by Grant Samuel to the Board."

The BOWMAN
01-04-2009, 11:00 AM
Sigh.... Those were the days.

"The Board does not recommend that shareholders accept the offer at a price of
NZ$2.30 per share.

While the price represents a premium on recent trading history of TOWER
shares, it does not fall within the valuation range of $2.45 - $2.89 provided
by Grant Samuel to the Board."

Grant Samuel's valuation is about as useful as mine. :D

scamper
07-05-2009, 09:28 PM
Up nearly 20% since your post, Belgarion.
Scamper topped up late March, and spent a month wishing i hadn't.
but now, the chart is starting to look good: downtrend broken, sp above 30- and 90-day moving averages, stochastics, macd, and rsi getting positive.
does anyone have access to obv?
cheers.

scamper
11-05-2009, 12:57 PM
and two more rises, with a current buyer at 166.
Calling Phaedrus!
1. Is it valid to look at the one-year downtrend and announce that it's over, or must one take the 2/3-year view and remain cautious?
2. How does the obv look (and other indicators, come to that)?
Thanks in advance, cheers, Scamper.

Lego_Man
11-05-2009, 01:07 PM
Yeah i bought this stock at 1.30 a few weeks ago - i wish Incredible Charts covered the NZX so i could have a play with the charts. I'm guessing OBV has exploded of late given the high volumes i've just been casually observing on ASB Securities day to day.

Phaedrus
11-05-2009, 02:48 PM
Hi Scamper, my guess is that if you had access to an OBV plot, you wouldn't be wondering about other indicators or indeed, the "official" trend! An OBV reversal such as this is impossible to miss - or misinterpret.

http://h1.ripway.com/78963/TWR511.gif

Technically, TWR is still in a long-term downtrend, but within the context of its great volatility, that really doesn't mean much. What we have had is a Price/volume climax, but atypically this was spread out over several weeks. I can't see that anyone would have acted on the trendline break marked with the small green arrow - the OBV was clearly falling at that time, even though this was before its big plunge. See how the OBV gave plenty of early warning, rocketing up in a very clear Buy signal weeks before the price started to move. A textbook example of Volume preceding price.

Financially dependant
11-05-2009, 03:11 PM
Thanks for your input Phaedrus........I learn something every time!



Yeah i bought this stock at 1.30 a few weeks ago - i wish Incredible Charts covered the NZX so i could have a play with the charts. I'm guessing OBV has exploded of late given the high volumes i've just been casually observing on ASB Securities day to day.

You can import NZX data from Yahoo into Incredible charts....;)

Lego_Man
11-05-2009, 05:01 PM
Can you even do that in the trial version? I cant figure it out...

ratkin
11-05-2009, 05:32 PM
I only bought them because i liked the tv ad :eek:

Financially dependant
11-05-2009, 05:33 PM
Can you even do that in the trial version? I cant figure it out...

Yes you can, I can't open the software atm but from memory it is listed under securities....data from yahoo (or similar)!

Hoop
11-05-2009, 05:53 PM
Can you even do that in the trial version? I cant figure it out...

Yes

Lego_Man I'm assuming you have already downloaded and set up (registered) your free program.

When you open up your incredible charts pro program from your desktop icon... your ID page pops up .. click the tick button.... a chart then appears.

In the box situated about 70mm down on the left hand, type in the NZ security you choose.

example

Tower ...type in y_TWR.nz
Telecom ........y_TEL.nz

Lego_Man
11-05-2009, 06:00 PM
Thanks for that!

Now to analyse my brother's GPG buy...

chippy52
11-05-2009, 06:18 PM
To use Incrediblecharts click securities > load by symbol from Yahoo > type in symbol.NZ > load & your good to go.

corporateraider
11-05-2009, 09:14 PM
I only bought them because i liked the tv ad :eek:

I totally agree Ratkin that we should base our decisions on familiarity and solid research. I'm thinking that my next holiday will be in Brazil because Gisele Bundchen is totally hot. Less senior members would do well to heed the wisdom that we bring to these threads

Phaedrus
12-05-2009, 06:34 AM
Gisele Bundchen is totally hot. Less senior members would do well to heed the wisdom that we bring to these threads Gisele Bundchen? Who he?

I did some research and came to the conclusion that your wisdom is paired with taste, discernment and an understandable penchant for Brazilians! http://lh6.ggpht.com/fisherwy/Rx9nyC2KsMI/AAAAAAAAKcs/BVCdlLj1O2w/Gisele+Bundchen[12].jpg

Lego_Man
12-05-2009, 07:06 PM
The 14 day RSI on TWR reads 80 (overbought).

What say ye technical wizards?

corporateraider
12-05-2009, 08:21 PM
As always Phaedrus your research is better than mine!

Phaedrus
12-05-2009, 08:29 PM
An RSI of anything over 70 means that technically, the stock is overbought. When the RSI drops back down through this level it generates a SELL signal. BUT when stocks are in an Uptrend they will repeatedly move in and out of OverBought territory as the uptrend progresses. This generates a string of misleading "Sell" signals. They do identify good "short-term" exit points, though, if that is what you are looking for.

The chart below covers a halcyon period in TWR's history when it was in a nice steady Uptrend. See how the RSI was often "OverBought" but that in the scheme of things this meant very little. You wouldn't have wanted to have acted on any of those "Sell" signals, right?

Trend indicators are what is required to monitor trends. Oscillators are at their most useful with ranging stocks. Similarly, trend indicators are not good with ranging stocks, generating a string of misleading and contradictory signals.

This is a very brief and simplistic overview of the RSI indicator. There is a lot more info on the net if you Google RSI.

http://h1.ripway.com/78963/TWRrsi.gif

Lego_Man
12-05-2009, 09:02 PM
Thanks for that, i'll file RSI away for future learning.

(primary school hasnt even got to moving averages yet)

:D

shasta
12-05-2009, 09:08 PM
Thanks for that, i'll file RSI away for future learning.

(primary school hasnt even got to moving averages yet)

:D

Then stop sneaking a look on the next page :D

scamper
03-06-2009, 09:17 AM
Hope you guys are still holding!
All the charts signals are go.
scamper's delighted with the recent buy at 131.

beacon
03-06-2009, 10:41 AM
Good on ya scamper. i missed this one. I sold at 131

scamper
03-06-2009, 11:04 AM
oooh, ouch.
hope you found other good stuff instead!

beacon
03-06-2009, 12:04 PM
Yes thanks, making money in US. No worries...

Lego_Man
03-06-2009, 12:08 PM
Well i pulled out prematurely a few weeks back when i got nervous about the smell of dead cat.

Should have held my nerve, would have made another 20% on them.

whatsup
10-08-2009, 04:40 PM
Belg..., your better to switch to IFL in Aussie, bigger market better( imho) share.

winner69
24-08-2009, 09:02 AM
All your Christmas's coming at once today?

winner69
24-08-2009, 01:34 PM
Initial thought was it was the big pay day ... like GPG taking the rest of it ... or somebody wanting the lot

Hey no - they want more of your cash

whatsup
24-08-2009, 02:23 PM
Soso ann nutural not like the Aussie banks, but will take up as with the underwritting its GPG's way of feeling out the soft holders, its all in the future with the economic recovery!!!

macduffy
24-08-2009, 03:36 PM
Well it's a renounceable issue so if we don't like it we can sell the rights.

At a cum issue price of $1-74 the rights will have a theoretical value of 30c so there's something in it for those who don't subscribe. Will be interesting to see at what actual price the rights trade.

macduffy
24-08-2009, 04:16 PM
Soso ann nutural not like the Aussie banks, but will take up as with the underwritting its GPG's way of feeling out the soft holders, its all in the future with the economic recovery!!!

Interesting though that GPG aren't underwriting the issue - Goldman Sachs are.
GPG may be a sub-underwiter, of course.

POSSUM THE CAT
24-08-2009, 06:24 PM
Macduffy would they have to make a takeover offer if they did underwrite the offer and had to take anything more than a small portion. They are allready taking theirfull entitlement. Remember the rules on increasing shareholdings. If my memory is correct they can only creep 5% per year and may have brought some more earlier in the year as well

macduffy
24-08-2009, 06:46 PM
Yes, I think you're right on that, Possum.

The issued capital will be about 31% higher on completion of the issue so I guess that gives them an absolute bigger number in the 5% if they're so inclined but I really don't know the detail of that. I was really only making the point in reply that the underwriter was Goldman Sachs, not GPG.

whatsup
24-08-2009, 10:22 PM
Once the rights issue is out of the way they will then have to inform the market as to their % shareholding weather they gained any increase by the under righting or as the sub under righter it doesnt really matter.

POSSUM THE CAT
25-08-2009, 03:58 PM
Whatsup if the get to much they have to make takeover offer

whatsup
25-08-2009, 04:12 PM
Yeh Possy but they control the numbers and can stop at just below the take over treashhold thats why they are a sub under writer and not the under writer.

macduffy
25-08-2009, 04:58 PM
Yeh Possy but they control the numbers and can stop at just below the take over treashhold thats why they are a sub under writer and not the under writer.

That's right.

I would imagine that any sub-underwriting agreement that they enter into will either be a number such as they don't exceed the limit or will include a clause that limits their liability to take up at that number.

I see that there are 57,000 shareholders - a lot of them fairly "passive" holders from the old NZ Govt Life days - so it's quite possible that there could be a significant underwritten shortfall, despite the fact that the rights will have a value.

winner69
25-08-2009, 05:26 PM
There's a division of ASB on the block Belg

shawsie
26-08-2009, 07:24 AM
so w69, Sovereign is the answer?

makes good sense.---

1.Tower needs a bank alliance after failed forays with ANZ and Nat, decimated general insurance book
2.ASB get Twrs new insurance software
3. standard back office function deduplication, a gpg speciality
maybe 4 ASB could use some cash to appease parent as times are (relatively) hard for poor banks, no visa ipo this year

i think that would turn twr into a buy. what do you think rights will trade at?

macduffy
26-08-2009, 10:16 AM
That all makes sense, shawsie. If TWR aren't looking at Sovereign then they should be!

Theoretical rights price is 28-29c based on today's cum rights price so far but as for where they might trade........?

macduffy
27-08-2009, 02:37 PM
IAG might flick State ... Or even exit NZ completely?

Maybe, but I doubt it.

A lot of Australian companies get a bit vocal about their NZ business when NZ has a downturn. Then they realise that it's a very safe, if unspectacular place to earn steady profits compared to some of the alternative ways of spending their capital.

;)

Jay
27-08-2009, 03:12 PM
I think it might be Jacques Martin ASB are selling off Not Sovereign

shawsie
28-08-2009, 12:29 PM
probably no survivors in mgmt of the last foray, with large consequential write offs.

do you have a target in mind? (an Aussie target not a price target)

the 2 plays that would make me sit up and take notice are merge 2 books, keep 1 back office; and public-private-partnership of ACC business.

Ash
28-08-2009, 02:58 PM
It is Jacques Martin ....

http://www.stuff.co.nz/business/industries/2809414/Jacques-Martin-sale-involves-100-workers

winner69
30-08-2009, 09:19 AM
Love headlines like "GPG's Tower fee psrt of 'insidious' practice'[/B] by Jenny Ruth which appears today in the SST

Apparently GPG get $577.750 for making an early commitment to participating in the raising - Goldman Sachs pay it out of their (outrageous) 2% underwriting fee

Even better Bruce Sheppard dscribes it as 'repugnant' - mainly because Tower isn't in any real strive etc and goes on to ask 'is GPG really that hard up? Because it does look rather silly and self-serving'

Jenny's conclusion is she sees this as an a fantastic opportunity for GPG to average down the cost of its Tower stake (didn't it pay $2.30 a share last year) and the $1,34 for the new shares is a lot less than that

With GPG essentially running this outfit who will be the winners out of this raising? Generally not the small shareholders

winner69
30-08-2009, 09:42 AM
On the ASX a buy order for 8 cents

winner69
04-09-2009, 07:08 AM
You didn't count the ones in Aust Belg

ratkin
05-09-2009, 09:42 AM
I not received any offer documents yet , should they of arrived by now?

macduffy
05-09-2009, 11:06 AM
I not received any offer documents yet , should they of arrived by now?

I havn't got mine. Still on their way I would think. It seems to be the usual thing these days for rights trading to commence before documents arrive.

biker
05-09-2009, 11:08 AM
Documents will be despatched 7/9/09. Rts trading ends on NZX 21/9/09. Offer closes 23/7/09.

ratkin
05-09-2009, 03:24 PM
Thx . i will be taking up the rights and not selling them

shawsie
08-09-2009, 07:57 PM
the more I look at this the less I like it. shareholders (disc- not a holder) are asked to front with 1/3rd more cash for no reason.

if twr mgmt want to buy, why not put it in train, then get holders to stump up the cash? at that point you know what you are getting for your bucks. sure better than borrowing in this climate, but raising cap for its own sake, and GJBW and GPG clipping the ticket,

holders may not appreciate my comments, fair enough. when I heard of the issue I looked for positives (earlier posts), perhaps its secret squirrel, and I will stand corrected, but IMHO, time to take out the trash.

macduffy
09-09-2009, 07:44 AM
Fair point, shawsie.
There's a lot of the old GPG maxim of " have faith in management to do the smart thing" about this issue, and GPG's companies don't have a great track record recently.
I'd have a bit more confidence if plans for employing this new capital were to be articulated before the issue closes, but I suppose that's wishful thinking?

Hoop
09-09-2009, 08:10 AM
the more I look at this the less I like it. shareholders (disc- not a holder) are asked to front with 1/3rd more cash for no reason.

if twr mgmt want to buy, why not put it in train, then get holders to stump up the cash? at that point you know what you are getting for your bucks. sure better than borrowing in this climate, but raising cap for its own sake, and GJBW and GPG clipping the ticket,

holders may not appreciate my comments, fair enough. when I heard of the issue I looked for positives (earlier posts), perhaps its secret squirrel, and I will stand corrected, but IMHO, time to take out the trash.


Quote "....holders may not appreciate my comments, fair enough....."

I'm a holder and I appreciate your comments...a good thought provoking post.
Investors don't enjoy investing their money on blind faith with the perception that they will lose out to the big guys on this deal...I hope some senior Tower Managers read this TWR thread and think more about their shareholders... but from their recent actions I doubt it.

macduffy
09-09-2009, 10:01 AM
They might use the 81 mill raised to retire the 81 mill raised previously. (Just thinking out loud).

I think the original announcement talked about " organic growth issues" - whatever that means!

;)

ratkin
10-09-2009, 07:39 PM
Is there much point in applying for extra shares ?

macduffy
11-09-2009, 07:25 AM
Is there much point in applying for extra shares ?

There probably is.

Tower still has a lot of "passive" small shareholders from the demutualisation and it's possible that a higher proportion than usual will either ignore the issue, not understand it, not be able to afford it, and/or have insufficient rights to warrant selling and paying minimum brokerage.

Not sure I would want too many more, although there is value there with the rights selling at 26c.

;)

Balance
11-09-2009, 07:33 AM
No point buying during rights issue. Too much profit at current sp for underwriters. They will supply stock post-rights issue to take their profits.

Can always count upon at least 5% shortfall. In this case, $4m plus of cheap stock for underwriters to make a profit on. At $1.60, 20% profit on each share.

macduffy
11-09-2009, 08:03 AM
This issue is a bit unusual though in that it is a renounceable entitlement issue with rights trading, but also, ostensibly, allows shareholders to apply for additional shares.

Will be interesting to see how many additional shares are actually issued to shareholders, compared to the number taken up by underwriters.

Hoop
11-09-2009, 09:44 AM
No point buying during rights issue. Too much profit at current sp for underwriters. They will supply stock post-rights issue to take their profits.

Can always count upon at least 5% shortfall. In this case, $4m plus of cheap stock for underwriters to make a profit on. At $1.60, 20% profit on each share.

Yeah ...the heads price can be under pressure during the rights issue and ex period.

So far the rights are priced at full value and are behaving with minimal volatility (A Boring :( Rights toy) ...telling us that so far the market "assumes" that the "possible" wave of sellers after the 23 Sept won't be enough to depress the price further ...but bugger all upside either.

.... Still 1 1/2weeks to go for Mr Market to change its mind.

Walfootrot
11-09-2009, 10:08 AM
I think McD is correct- it will be very interesting to see how many took up the offer of extra shares- i for one did.

Will this information be published eventually?

RRR
11-01-2010, 07:54 PM
TWR has been a quiet performer...I am quite happy to hold even if the price drops after the record date..In fact i will consider buying more if the price drops below $2.00..EPS has been growing since last 4-5 years... Has any other significant company in NZ grew EPS during recession?? I am not sure..

Current price $2.17-PE of less than 10 and Price/Book value of <1.5. I think TWR is still undervalued. There is still room for growth for at least 4-5 years given that NZ insurance market is undergoing consolidation and TWR will benefit..Div yield of 4.5% at the current price. Upgrading their computer systems will further reduce the costs and improve profits in a few years and their funds under management will grow quite significantly than expected..

I am a long term holder and we will see what happens in the next few years..Good luck Belg..:)

ratkin
11-01-2010, 08:02 PM
Price has almost doubled up since march , proved to be one of the better bargains to come out of last years market panic

_Michael
12-01-2010, 09:25 PM
Interesting to see TWR appear on the NZX release this week among top 10 most "short sold" stocks.

Wonder if the rally has some of those guys scrambling to cover their shorts? Risky business that short selling!

I hold as while the insurance business is stable and ticking over nicely, their exposure as one of the default providers to KIWISAVER funds under management may provide for serious growth to their investment management business over the next 5-10 years.

Although expect they may even get taken out in the next 3 years...

ratkin
09-02-2010, 01:16 PM
Very positive address to the shareholders today . That 1.30 last march starting to look like money well spent.
They seem very bullish in their outlook despite "challenging conditions"
Look like this is one stock we wont need to worry about for a while

Anna Naum
15-03-2010, 08:12 PM
Was it Tower that took a hair cut the last time there was a big storm in Fiji?

macduffy
02-04-2010, 12:55 PM
2009 among least costly for insurers (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10635892)

Should be good for TWR. Charts say TWR still in its uptrend. Fundementals say undervalued.

Except of course that the market looks forward so recent and current events will carry more weight. TWR will probably have some hefty claims from (fairly) recent Pacific events but probably not from the Queensland storms, unlike QBE, IAG, SUN etc.

I would think that the potential loss of the ANZ National Bank business, said to represent about a third of TWR's premium income, would be a bigger concern.

I hold TWR, from the Govt Life demutualisation, but prefer QBE as an investment.

ratkin
02-04-2010, 06:11 PM
These sort of events always happening , nothing to stress over , they are an insurance company

Jaa
02-04-2010, 11:56 PM
Its mostly all re-insured anyway.

The ANZ distribution loss has to hurt them. But who knows if they end up with the customers and no longer have to pay a cut to ANZ could work out ok.

macduffy
31-05-2010, 06:46 PM
A solid interim result from Tower and the first interim divvy since 2002.

Now, that's got to be good news!

macduffy
14-06-2010, 04:03 PM
I received my annual general insurance renewal letter today from ANZ - pages annotated "ANZCover General Insurance underwritten by Tower Insurance Limited" so I assume ANZ and Tower have settled their stoush over who "owns " these customers.

Of course, ANZ won't be writing any new business for Tower but at least it seems that existing relationships won't be disturbed.

rotweiller
14-06-2010, 08:25 PM
With there current obnoxious TV ads, thank goodness I sold my shareholding and would not invest in an insurance premium.
They can go,and get lost as far as I am concerned.
Cheers

RRR
15-06-2010, 07:51 PM
Not sure what else Tower needs to do to keep every one happy. :)

macduffy
26-06-2010, 08:56 AM
I received my annual general insurance renewal letter today from ANZ - pages annotated "ANZCover General Insurance underwritten by Tower Insurance Limited" so I assume ANZ and Tower have settled their stoush over who "owns " these customers.

Of course, ANZ won't be writing any new business for Tower but at least it seems that existing relationships won't be disturbed.

It's official now.

The Court of Appeal has ruled that TWR retains the right to renew nearly 200,000 fire and general policies sold through ANZ and National Bank.

This is a significant part, about a third, of Tower's premium income.

Of course, ANZ will now direct new business to its new insurance partner Vero and retains the right for insureds' information to be available to Vero. TWR is to challenge this point.

inghamp
08-07-2010, 03:35 PM
Hi All,

Quick question.
What would be a catalyst for price change. I heard a while ago that Tower was looking for companies to buy. would this decrease or increase their value?

CJ
08-07-2010, 04:20 PM
would this decrease or increase their value?Depends on what they buy and and what price. If their are synergys, even buying at market value can increase price.

In most cases that i see However, it asset acquistions just push the price down - just look at AIA last two purchases.

macduffy
08-07-2010, 04:50 PM
Depends on what they buy and and what price. If their are synergys, even buying at market value can increase price.

In most cases that i see However, it asset acquistions just push the price down - just look at AIA last two purchases.

That's true. But the benefit of acquisitions often takes some time to become apparent - or to to be seen to be a mistake!

Some companies seem to have a knack for making acquisitions work. Aussie insurer Oamps was good at this - until it got taken over itself by Wesfarmers! CPB has also made some very successful acquisitions over the years.

CJ
09-07-2010, 08:43 AM
I remember reading something years ago re mergers and acquistions in the US and the only people who really gained were teh management team who could justify higher salaries due to a bigger organisation. Empire building is only a good thing if it adds value.

Jaa
09-07-2010, 10:21 AM
The life tax changes are estimated to cost the industry $75m in profit a year, Tower's share of this would be around $7m. Under the changes existing life insurance policies can be grandfathered under the old laws for 5 years so most of the damage will be hidden for a while.

Will however give a short term bump in new business as policy holders scrambled to sign up for new policies and lock in their old premiums over the last couple of months. Just watch out for the inevitable drop post July 1. Be wary of any spin in the next report about "record levels of new business". Same kind of effect as the GST change only much larger. Premiums have risen from 5-22% across the industry.

ratkin
05-09-2010, 07:43 AM
Whats the earthquake likely to cost tower?

duncan macgregor
05-09-2010, 12:14 PM
Whats the earthquake likely to cost tower? I would think all insurance company share prices will take a hit when the market opens on monday. I also wonder tongue in cheek if they insured themselves up to the point of being able to trade out of it without going under. Macdunk

The BOWMAN
05-09-2010, 09:11 PM
I would think all insurance company share prices will take a hit when the market opens on monday. I also wonder tongue in cheek if they insured themselves up to the point of being able to trade out of it without going under. Macdunk

Great opportunity to buy into if that does happen. But I think it won't happen.

LJB
06-09-2010, 08:12 AM
Don't insurance companies have insurance for such events.

duncan macgregor
06-09-2010, 09:21 AM
I would think that the least profitable companies up to this point will tend to be risk adverse reinsuring to the point where they tend to be over reinsured for events like this. The problem that I see is if one company goes under creating a domino crisis with other more conservative companies. There is a lot of money to come out of this sectors profits, it would be a brave investor who would dip in trying to bottom pick.
Macdunk

PhaedrusFollower
06-09-2010, 10:22 AM
Sounds interesting Belg...what icomps would you consider...

macduffy
06-09-2010, 11:17 AM
Tower expects claims to cost the company $5m before tax, after reinsurance.

$3.5m after tax.

CJ
06-09-2010, 11:38 AM
Tower expects claims to cost the company $5m before tax, after reinsurance.


There we go - annoucement out - I’m guessing the 5 mill “cap” would have been where their Catastrophe (a form of stop loss that works at the whole-of-portfolio level) re-insurance contract fires. Pretty conservative and good to see that they took a bit of risk but not a big one.
So is $5m their effective 'excess' to be able to claim from their re insurers.

Jaa
06-09-2010, 11:48 AM
Tower expects claims to cost the company $5m before tax, after reinsurance.

$3.5m after tax.

This is the exact amount as they were liable for the Samoa Tsunami last year. Must be a general contract for any event. Good to know for any future disasters.

whirly
06-09-2010, 01:01 PM
I would think that the least profitable companies up to this point will tend to be risk adverse reinsuring to the point where they tend to be over reinsured for events like this. The problem that I see is if one company goes under creating a domino crisis with other more conservative companies. There is a lot of money to come out of this sectors profits, it would be a brave investor who would dip in trying to bottom pick.
Macdunk

While Im usually a fairly conservative investor. Im comfortable with my 1.77 entry this morning. My first buy for weeks!

CJ
06-09-2010, 02:35 PM
While Im usually a fairly conservative investor. Im comfortable with my 1.77 entry this morning. My first buy for weeks!

Good buying - why did you buy? As a long term hold and just taking advantage of a short term dip as an entry or as a specific short term gamble that the market had over reacted.

duncan macgregor
06-09-2010, 02:39 PM
While Im usually a fairly conservative investor. Im comfortable with my 1.77 entry this morning. My first buy for weeks! You got off to a good start WHIRLY with that one ,what about casting your eye over LPC which is fully operational but damage costing millions which is more than likely covered. Might be a good buy coming up when they start trading after the expected fall. Macdunk

whirly
06-09-2010, 03:49 PM
CJ, I bought as a long-term divvy payer. I am shopping quietly now as my TA signals fire. My homework on the weekend revealed TWR as a buy (discounting the fact that a bloody great earthquake had hit CHCH), and after deciding on a discounted $1.83 entry was happy to see it lower this am. I guess I got lucky that it has held at that I make more than my share of bad entries!.

Cheers Macdunk. Great to see you back too by the way! I'm am normally not what one might call a bottom feeder. Usually when I buy its a historically proven signal that it's time to sell.

I haven't looked at LPC yet. I will, I have a few on my watchlist with a couple of orders placed but not filled.

777
06-09-2010, 05:42 PM
Surely that works in reverse as well. ie they have liabilitiy to other insurance companies when they have big claims.

RRR
06-09-2010, 07:22 PM
I was expecting a carnage and that didn't happen-thank goodness for that. Who are these re-insurers? How does it work?

Disc-TWR is significant in my portfolio

macduffy
06-09-2010, 07:26 PM
Surely that works in reverse as well. ie they have liabilitiy to other insurance companies when they have big claims.

I don't think so.

Companies such as TWR lay-off part of their risk with reinsurers, generally large international companies who don't operate in "retail" markets. I'd be surprised if TWR was in that market.

peat
06-09-2010, 08:48 PM
re-insurance helps to counter the non random and clustering nature of insurance risk such as occurs from things like this quake and of course weather and flooding.
quakes really are a big clusterhit from an insurance perspective. every actuary's nightmare.
I doubt Tower would accept re-insurance but if they did it would achieve similar goals as using it, in that it would diversify risk.

Jaa
06-09-2010, 09:12 PM
I don't think so.

Companies such as TWR lay-off part of their risk with reinsurers, generally large international companies who don't operate in "retail" markets. I'd be surprised if TWR was in that market.

TWR is no where near the re-insurance market and neither should it be! Their business is insurance origination both general, health and life and savings and investment.

You need to be very large to survive the ups and down in the re-insurance market. Some of the major providers are Berkshire Re and Swiss Re both owned by Warren Buffet's Berkshire Hathaway. One closer to home that also plays in this market is QBE of Australian.

Its generally a good industry to be in long term so long has you have the financial wherewithal to withstand the odd catastrophe. Even then, re-insurers will often spread their risk amongst themselves. The risk ends up being effectively spread far and wide internationally of which the likes of IAG and TWR are only the first line.

ratkin
07-09-2010, 03:36 AM
Remember the reinsurers Lloyds of london

The "Names"--as the investors are known--didn't really invest anything at all. They merely pledged their assets, while the assets themselves--stocks, bonds, or land--continued to make money, for many years the "names" recieved money in dividends merely for pledging their money.
However it all went belly up after a series of natural disasters and asbestos claims meant Lloyds could not meet the claims and had to ask the "names" for money. Many had no idea of the risks they had been taking and lost their ancestral fortunes

peat
07-09-2010, 07:47 AM
Lloyds insurance methods and re-insurance are not the same thing though Ratkin.
Lloyds style of insurance as you said allowed unlimited liability for its names.
Re-insurance is the placing of specified limited risks with another insurer who is larger, and not exposed to the same risks due to location etc.

winner69
07-09-2010, 08:58 AM
Insurance make most of their money from the investment of premiums ..... the insurance margin at the end of the year is the icing on the cake.

One of the big exposures that insurors have globally is that catastrophic events are now happening more often in centres of larger populations .... ie claims in total are tending to far higher than they have been in the past (eg Chch will cost more than Gisborne which cost more than Edgecumbe etc). Some studies show that globaly total reserves held by insurance companies are probably totally inadequate if this trend continues .... unless premium rise off course

Anna Naum
01-10-2010, 09:00 AM
Trading halt

ratkin
01-10-2010, 10:46 AM
Any ideas?

Jaa
01-10-2010, 10:48 AM
They have long flagged their intention to make some acquistions at the right price.

Shouldn't need a trading halt to announce a profit upgrade (or downgrade!) surely.

ratkin
01-10-2010, 10:52 AM
Not many clues from the shareprice , one would suspect if it was very good
or very bad then we would of seen more price change over the last week.

Could be somethin g to do with GPG but then they would be halted too wouldnt they?

Lego_Man
01-10-2010, 10:54 AM
Not many clues from the shareprice , one would suspect if it was very good
or very bad then we would of seen more price change over the last week.

An acquisition, you'd have to think.

Anna Naum
01-10-2010, 12:18 PM
Takeover of Fidelity Life

Jaa
01-10-2010, 04:24 PM
NZHerald is describing it as a hostile bid but I'm with you Belgarion. One would think they have spent the last year twisting the major shareholders arms and must have at least the 53% the family trust owns in the bag? Some shareholders obviously wanted to sell out and other's prefered to continue to hold hence the split cash/share offer?

From Fidelity's website:


Fidelity Life is a unlisted company. Shareholders number approximately 150 with about 53% of shares on issue owned by a single family trust. The company maintains its own share register and keeps a list of persons who have indicated an interest in buying or selling shares. For further information please contact the Company Secretary.

Recent trades are:

2010

Trade date Number of shares Price per share
01/06/2010 200 $80.00
24/03/2010 2000 $76.95
23/03/2010 1300 $77.00
21/02/2010 100 $70.00
21/01/2010 200 $76.95

2009

Trade date Number of shares Price per share
30/11/2009 300 $76.95
30/11/2009 200 $76.00
21/05/2009 246 $70.00
30/04/2009 500 $70.00
27/04/2009 300 $70.00
21/04/2009 500 $70.00
31/03/2009 4000 $70.00
26/03/2009 1000 $70.00
23/03/2009 560 $70.00
23/03/2009 560 $70.00
23/03/2009 560 $70.00

Jaa
04-10-2010, 12:34 PM
TWR's PE ratio is only about 8.4 and has NTA of $1.40'ish and is yeilding 9.9% ... A buy? ... Given GPG's got to do something with their 30% ... A screaming buy? ... Sometimes I just don't get markets!

This is what I have been asking myself!

The extra stat I will throw in is their earnings have grown an average of 19.5% year on year for the last four years.

macduffy
04-10-2010, 03:18 PM
I can only assume that the bust-up with the bank (ANZ?) is weighing on the sp and the market is waiting to see what the bottom line effect will be. (My own analysis suggests 1/10 of b.gger all and I'm not that concerned.)

Just a thought but perhaps there's a view that GPG might influence a sale, at less than full value, as part of the expected rationalisation of GPG's assets. Their 35% of TWR would be one of their more readily saleable holdings, particularly if they can deliver the whole TWR operation to a buyer.

macduffy
04-10-2010, 05:09 PM
Yeah I thought about that too but in the context of GPG unloading I'd expect the market would be paying a premium price for control so it'd be far higher than current sp - say $2.80 or more.

But who would be in the market for a TWR/Fidelity?

I would think that Sovereign, AMP,AXA would be interested but may have trouble on the competition front. Kiwibank should be interested but would have to somehow convince the govt to put up even more capital than what they already need to finance their growing banking business.

There may not be many contenders!

Anna Naum
05-10-2010, 12:40 PM
Fidelity says major shareholders to reject Tower offer
BusinessDesk | 1:01pm
Fidelity Life Assurance says its biggest shareholders, with 70 percent of the company, plan to reject rival Tower ’s unsolicited $118 million cash and scrip takeover offer.

CJ
05-10-2010, 12:54 PM
Fidelity says major shareholders to reject Tower offer
BusinessDesk | 1:01pm
Fidelity Life Assurance says its biggest shareholders, with 70 percent of the company, plan to reject rival Tower ’s unsolicited $118 million cash and scrip takeover offer.With the major shareholder holding over 50%, you have to wonder why TWR bothered. I would have thought lots of back room talk should have taken place first.

macduffy
05-10-2010, 01:13 PM
Yes, it sounds a pretty inept way to go about things. Perhaps they took advice from GPG!

No hope of success if TWR can't come to terms with these major holders.

Lego_Man
05-10-2010, 01:23 PM
Yes, it sounds a pretty inept way to go about things. Perhaps they took advice from GPG!

No hope of success if TWR can't come to terms with these major holders.

Idiotic is the word i would use to describe it.

JayPe
06-10-2010, 01:56 PM
Latest News:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10678424

Summary:
They made a takeover offer conditional on 90% acceptance but didn't talk to the three major shareholders who own 53%, 17% & 11% respectively. Furthermore, the 17% shareholder says that he was surprised as the only contact was a phone call about it three months ago.

Seriously, is there some hidden strategic reason for publicly announcing this offer like this? It just seems inept.

ENP
06-10-2010, 02:27 PM
If these people are running the company, who cannot even make a few phone calls and now have made themselves look like clowns...

Why would you invest your hard earned savings there?

CJ
06-10-2010, 04:13 PM
Maybe they realized they weren't going to get anywhere with the shareholders behind the scenes, so they threw an offer out there, hoping they would show their cards.

By bringing it out in the open, the Directors have a fiduciary duty to look into it (ie. get a valuation and give a recommendation), even though the main shareholders are opposed to it. I think that is why the Directors made a comment to the effect it was inconvenient and unwelcome.

Felix
06-10-2010, 08:27 PM
Yeah I agree CJ. It is going to shed light on the privately held company, it might drag out some other interest in industry consolidation and it is probably only the opening bid. Of course the main shareholders of Fidelity are going to say "thanks, but no thanks" to the first offer. Who would take the first offer that is made? Tower will put a compelling case to them, raise the offer and then we'll see what the main shareholders say.

macduffy
07-10-2010, 07:13 AM
Or, as you say, other offers might emerge and trump TWR.

Once you start talking to a potential target you can't avoid that possibility. I still reckon though it's a pretty poor strategy not to first secure major shareholdings when such a few holders determine the outcome.

CJ
07-10-2010, 08:08 AM
One other thought about the major holder. It is the family Trust of the now deceased founder from what I understand. While the Trustees might not want to sell, my guess is some beneficiaries probably started salivating over the thought of getting some cash out of it. Those Trustees have probably had a few calls asking for it to proceed (maybe at a higher price but proceed none the less).

It is all about stirring it up and creating uncertainty. TWR has probably spent very little money so far on the offer, yet the impact many times greater.

macduffy
26-11-2010, 07:15 AM
When is FY being announced? ... TWR should have been doing OK to Very Good in the last 6 months.

Today's the day?

Recent modest SP strength points to a satisfactory result?

winner69
26-11-2010, 11:12 AM
http://file.nzx.com/000/627/4392627.pdf

Solid ... But not spectactular.

Seeing Muir has been given the shove from Pumpkin Patch I wonder if anybody sees Sam Stubbs tainting Tower Investments name ..... Sam might not have been chairman or director but many think he did a great job in helping Hotchin et all sucking those Allied guys in

macduffy
02-02-2011, 07:01 PM
TWR says it may make a capital return if it can't find anything to buy.

http://www.stuff.co.nz/business/4609659/Tower-directors-challenged-on-cash-hoard

Jaa
02-02-2011, 08:50 PM
Good on Gaynor for giving them a hurry up.

CJ
11-02-2011, 11:33 AM
If they sell their stake to one purchaser it will trigger a takeover (or 50% at least), since GPG holds above 20% (they hold 35% from what I can tell.)

RRR
11-02-2011, 11:47 AM
Too confusing for me. GPG wants to sell 35% stake - who will buy it, surely they will have to sell it at a discount (??) being a 'forced sale'. And, TWR is considering capital return! Cant they buy back shares (at least some) from GPG at a discount using the pile of cash they have?

macduffy
11-02-2011, 11:57 AM
Too confusing for me. GPG wants to sell 35% stake - who will buy it, surely they will have to sell it at a discount (??) being a 'forced sale'. And, TWR is considering capital return! Cant they buy back shares (at least some) from GPG at a discount using the pile of cash they have?

Buybacks have to treat all shareholders equally, ie either stand in the market or make a proportionate offer to all.

Now that GPG's TWR shares are for sale it gives a degree of certainty which may bring out interested buyers. The result may be some competition for the stake - and the inside running for a full takeover. At least, that's what the market is betting on at present.

RRR
11-02-2011, 12:31 PM
Thanks Macduffy for the clarification.

Jaa
11-02-2011, 01:18 PM
Rumour from Today's Herald that Tower are sniffing around Huljich.


Tower, which you will recall recently launched a futile bid for Fidelity, is allegedly 'in talks' with Huljich. Fidelity itself has also been mentioned as a possible buyer for Huljich.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10705527

_Michael
12-02-2011, 11:24 AM
With solid operations in Life, Health and General insurance...

the natural competitive advantage of being a default KiwiSaver provider...

and an asset rich over capitalized balance sheet...

TWR is a sitting duck in my opinion.

A very attractive asset to any of the major banks or Wealth Managers or Insurers.

You can be sure GPG will ensure a premium price negotiated also.

macduffy
12-02-2011, 12:18 PM
[QUOTE][You can be sure GPG will ensure a premium price negotiated also. /QUOTE]

I'd like to think so but with GPG I'm not taking anything for granted!

TWR has been effectively "in play" for some time in the sense that the market knew that GPG would want to quit it at some stage, as it did with the Aussie parts of the original business. But at least the latest move serves notice to interested parties to get their acts together with a little more urgency.

Jaa
14-02-2011, 02:00 PM
To me NAB is the obvious buyer, no competition issues and achieves in NZ what they were trying to do with AXA Asia Pacific.

If we use the 16x P/E ratio that was used by AMP for AXA AP and by NAB for Areva we get a share price of 0.223 * 16 = $3.57

modandm
14-02-2011, 02:32 PM
I think there are a few wishful thinkers on TWR.

The fact that they have not already been snapped up is an indication of concerns potential acquirers have for the business.

My concerns relative to business unit would be:

General - TWR does okay - but in a very competitive sector is loosing against IAG

Health -Struggling against a dominant not for profit which is far more capable in southern cross.

Life - Tough business in the best of times - TWR is making some progress but there is lots of competition and big banks arms e.g Soveriegn have a clear advantage

Investments - Here TWR is doing quite well. Imho this is the best of the TWR businesses and would be great spun out.

Just to end I would like to say I am no expert on tower at all - just my observations on the market and my xp consulting to SX and TWR

modandm
14-02-2011, 02:33 PM
To me NAB is the obvious buyer, no competition issues and achieves in NZ what they were trying to do with AXA Asia Pacific.

If we use the 16x P/E ratio that was used by AMP for AXA AP and by NAB for Areva we get a share price of 0.223 * 16 = $3.57

AXA AP and Tower are totally different. One is a FP network with FM and Insurance. One is a Insurer and FM without a FP network.

Jaa
14-02-2011, 03:18 PM
AXA AP and Tower are totally different. One is a FP network with FM and Insurance. One is a Insurer and FM without a FP network.

AXA and Tower (& AMP) have been in competition for well over 100 years.

They both sell Life Insurance, managed funds and are defualt KiwiSaver providers which togetjer is well over half of each company's business. TWR have a sizable General Insurance business that AXA doesn't but I don't see how that is a disadvantage from say NAB's perspective?

TWR has a non-aligned financial planner network that isn't as big or as effective as AXA's aligned adviser network but isn't small either. As NAB/BNZ already have hundreds of branches and BNZ Partners centres around the place I don't see this as a deal breaker.

winner69
21-02-2011, 10:34 AM
See Shoeshine (NBR) suggests that Tower use their surplus capital to buy back some of the GPG stake itself ....... GPG interest becomes less than 20% - then it would be easier for GPG to quit their reduced holding

Interesting thought

lissica
23-02-2011, 11:32 AM
Not a bad idea w69 - at the right price of course - discl: hold both.

I'm guessing that TWR's R/I arrangements will limit their exposure to just 5 mill again. Any dissenters?

That's what they said in yesterdays announcement.

CJ
23-02-2011, 12:32 PM
I'm guessing that TWR's R/I arrangements will limit their exposure to just 5 mill again. Any dissenters?Any chance they can claim it was an aftershock (technically true) from the original quake and therefore no further exposure. I guess not or else they would have said.

lissica
24-02-2011, 02:08 AM
Was somewhat busy yesterday and through the night ... Only just caught up about 15 minutes ago. Sorry for the dumb question and thanks for the response lissica.

No such thing as a dumb question, and you were spot on anyway >.<

Snoopy
28-02-2011, 09:58 AM
I'm guessing that TWR's R/I arrangements will limit their exposure to just 5 mill again. Any dissenters?


Surely real issue is EQC levies up 200%, overseas reinsurance premiums up sharply. If houses are still insurable against earthquakes in NZ, and I stress that 'if', I would say that it will be impossible to insure quite a modest suburban house for less than $1000pa. Perhaps people wil cope by just dropping their contents insurance to pay for it? This can't be good news for retail insurance companies can it?

SNOOPY

CJ
28-02-2011, 10:23 AM
Perhaps people wil cope by just dropping their contents insurance to pay for it? I see it as a positive. People will ensure that they are fully insured as events like chch and floods in Queensland (of all places following years of drought) only go to show that you need to be fully insured in case mother nature decides to strick. Many Aucklanders/Wellingtonians will be reviewing and upping their policies.

winner69
28-02-2011, 11:13 AM
I see it as a positive. People will ensure that they are fully insured as events like chch and floods in Queensland (of all places following years of drought) only go to show that you need to be fully insured in case mother nature decides to strick. Many Aucklanders/Wellingtonians will be reviewing and upping their policies.

Just think of the economic impact of that on the country

There's just over 1.6 million households in NZ .... lets say 1 million of them increase their insurance cover and/or get charged more by their insurors ... lets say $500 each ... thats $500m more in premiums for the household to cover

CJ would say good news for the likes of TWR ....heaps more preniums to invest to make heaps more money when the risk probably hasn't increased much from a week ago

On the other hand thats less for the households to spend on other stuff ....$0.5 billion
is more than 1% of total annual retail spend so implications here.

Whats happening in the world of insurance in interesting. It is a multi trillion dollar industry .... appaently 2nd only to tourism worldwide .... much bigger than the oil business etc. What they have beeen seeing lately is a trend to natural disasters hitting large population areas .... cities etc where natural disasters have not really tended to occur. Many say climate change is the reason behind this trend (possibly climate change can trigger earthquakes?) ....a nd as the pundits say insurance companies have large amounts invested in industries thatare the cause of this climate change .... and invest very little in businesses (more environmentally friendly ones) that could eventually mitigate their losses ... the same pundits say they deserve all they get .... but forget that end of the day it is you and me that pays

CJ
28-02-2011, 11:25 AM
CJ would say good news for the likes of TWR ....heaps more preniums to invest to make heaps more money when the risk probably hasn't increased much from a week ago

On the other hand thats less for the households to spend on other stuff ....$0.5 billion
is more than 1% of total annual retail spend so implications here.
This is the TWR thread, hence my comments.

Snoopy
28-02-2011, 12:48 PM
People will ensure that they are fully insured as events like chch and floods in Queensland (of all places following years of drought) only go to show that you need to be fully insured in case mother nature decides to strick.

If they can afford it, O.K. A 20% increase the people might stomach it. A 100% increase and something else will have to give. I go for discretionary insurance costs to be cut. The thing is contents have become so cheap to buy at the Warehouse, it is hardly worthwhile having such insurance any more. Most depreciated item loss is well below the minimum policy excess offered.

SNOOPY

POSSUM THE CAT
28-02-2011, 06:11 PM
CJ & Snoopy The cost of full flood Insurance in Queensland would make the EQClevy even if it trebled look very cheap and they do not cover earthquakes at all unless their policy wording has change dramatically since I left approx 4.5years ago.

Snoopy
28-02-2011, 08:25 PM
Also, the unique nature of the EQC levy - effectively a not-for profit r/i contract in its own right - will keep r/i premiums down and retail premiums down due to kicking in before retail insurers have to pay out.


EQC levy is hidden inside the retail premium that all local retail insurers pay, last time I checked. Competition will only keep price rises down to 100% or so, IMO.

SNOOPY

Jaa
28-02-2011, 10:39 PM
EQC levy is hidden inside the retail premium that all local retail insurers pay, last time I checked. Competition will only keep price rises down to 100% or so, IMO.

SNOOPY

Snoopy your fears are unwarranted.

Insurance companies and their re-insurers spend a lot of time and effort working out their risk. A 100% price increase post a disaster would mean they were completely incompetent which believe me they are not.

As the TWR CEO said after the last quake, insurance, risk management and paying out claims is their core business and they are well prepared for it.

Tower is run very conservatively, more so than Suncorp (Vero, #1 in NZ) and IAG (State, NZI, #2) which makes sense as they are also smaller and more geographically concentrated. Thus TWR only have $5m at risk ($3.5m after tax) from any single event and the latest quake has the same financial impact for them as the recent Samoan Tsunami. No doubt they pay higher re-insurance premiums for such a small excess.

These re-insurance premiums are only a small part of what a policy holder ends up paying to remember. Looking at TWR's 2010 numbers for General Insurance and Health they had $340m of premium income and paid $21.6m in reinsurance. Thus a realistic 10-20% increase in reinsurance costs isn't going to make a lot of difference to the policy holder, maybe a 5% increase?

The global re-insurers know NZ sits on many active fault lines and would have factored it in. Its also been a long time since they have had to seriously pay out in NZ.

POSSUM THE CAT
01-03-2011, 10:44 AM
Jaa read the morning papers ReInsurers are thinking of withdrawing from reinsuring Australian & New Zealand due to the amount of claims

macduffy
01-03-2011, 01:31 PM
I can't vouch for this but I've read somewhere that Frank O'Halloran, CEO of QBE, has stated that QBE has most of its reinsurance locked in for the next three years. Anyone else seen this?

Doesn't help TWR of course.

PS Here's the link.

http://www.theaustralian.com.au/business/industry-sectors/reinsurers-may-avoid-australia-after-spate-of-disasters-qbe-boss-warns/story-e6frg96f-1226013758414

macduffy
11-03-2011, 03:09 PM
TWR is deferring a decision on a return of capital in the light of increased re-insurance costs following the Christchurch earthquake.

"While the Board will continue to keep TOWER's capital structure under review,
it is not expecting to finalise a decision on a return of capital to
shareholders in the short term."

shawsie
11-03-2011, 04:04 PM
Jaa, some thought on your analysis

General Insurance in NZ is easily the most cost competitive of the insurance types. GI runs across the industry on slim margins. Only cost of claim is re-insured, the operating costs will affect performance.

Re-insurers used to think Oz and NZ divsersified their portfolio and set premiums to match but will re-evaluate with 2*quakes, fires, floods and hurricanes. Re-insurance will go up by orders of magnitude as they re-rate.

Tower's re-insurance bar is set low because it has low market share, low exposure, not because of exceptional risk aversion.

Tower's sweet spot is Life and Health cover which run on thick margins. The threat is bank assurance, and players like Sovereign. I would not describe competition as fierce, nor is growth potential. Its an old boys club.

I dont see a lot of upside in value here.

CJ
12-03-2011, 07:31 AM
Surely all GI companies will be facing similar increases in costs which will see premiums increase accross the board, maintaining whatever (slim) profit margins they have.

This must only be a one year issue as they obviously can increase premiums for those that have already paid this year but next year, it should be increased.

shawsie
14-03-2011, 10:13 AM
Its a 10s of millions gap, and as this is insurance, major events will come along periodically and cause these sorts of blips, and these days the intervals do seem to be getting shorter.. Premium increases give customers a trigger to switch. Why wouldnt you go to AMI?

TWR does however give one of very few ways of including insurance in an NZX based portfolio.

scamper
14-03-2011, 10:35 AM
Sold last week, but well after a sensible TA would have quit.
Now, usually I badly stuff up the timing of sells, so there is every probability that twr will bounce soon.
btw
Scamper the dearest dog died last month after 13 years as a faithful co-contributor.
Scamper the person is soooo sad.
Have decided to keep his name in memoriam...
All pretty small stuff considering pike river, christchurch and japan.
Condolences and sympathies to all.

RRR
14-03-2011, 08:03 PM
Will the recent developments make it difficult for GPG to sell its stake in the near future for a fair price? It will be interesting to see what the TWR management does in this scenario.

Jaa
24-03-2011, 08:44 PM
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10714604

Last few paras :)

Fidelity would never be able to afford to take over TWR.

BNZ and Westpac are the front runners, lets hope for a bidding war.

Oh and I hope Mr Chaplin wasn't just referring to the rumour about BNZ that I started a few pages back ;)

Lego_Man
07-04-2011, 01:12 PM
Edit: Reading comprehension FTL

CJ
07-04-2011, 02:46 PM
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10717725
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10717744

Hmmm ... Not thrilled about that !Why?

My view is that TWR has been competing against AMI which has not been paying for adequate reinsurance. How are companies meant to be able to compete with companys that are determined to be 'too big to fail'.

Lego_Man
07-04-2011, 05:49 PM
I know...Christ i hate governments.

winner69
27-05-2011, 08:58 AM
What you think about the half year belg

At least they survived the Chch quake and can cover the $250m in claims

But don't you love it when they try to bamboozle you with science and report a fantastic result if it hadn't been for Christchurch and this little change in discount rate

Like me saying jeez I made heaps this year if only I hadn't spent as much

Never mind the market will LIKE ... you'll be OK

Try and work out how much of the profit came from investing the premiums .... thats a good exercise

RRR
28-05-2011, 07:44 PM
Not a bad result in the circumstances and the dividend will keep the loyal shareholders happy. Very annoying to see their accounts - exclude (or normalize) Christchurch earthquake event. Why? They are a pure insurer after all, so why try to exclude natural disasters! They should be expecting the unexpected:(. FUM have grown thanks to Kiwisaver.

janner
29-05-2011, 05:43 PM
Belgarion..

You say in regard to Tower .

" and a much needed source of additional revenue (i.e. growth). "

Is Tower in declining growth ??

Has Tower got it's back to the wall ??.

Why ??..

Is Tower in need of outside growth ??..
Are they incapable of stepping in to this uncertain market and producing their own growth ??..

Towers price is attractive at this moment with the figures available..

I do not share your optimism that Tower can fill the confidence gap to the NZ public, produced by the CH-CH earthquake.

RRR
30-05-2011, 08:01 PM
Few observations about their fund management business, me being their customer. My employer superann (not kiwisaver - with asb) is with Tower and their performance is not worth mentioning. Their global equity investments is through a big fund management company in UK (fee gauging from 2 sources!) - understandably it is very difficult for NZ fund management company to invest in different markets in the world considering the amount of money available to invest and will be very expensive to do so.

What about NZ share fund? They use use local fund managers to invest in NZ but their portfolio matches the index whenever I look at it and the size of the fund is not huge either (20-30million or so) to be able to move the market. Why use the fund managers then? Why cant they go index tracking route and get rid of the managers and will save tax for the investor by doing so.

Consumer NZ website is right in their observation that - 1/3rd of your gain is taxed (active managing), 1/3rd evaporates as fees and investor get to keep the 1/3rd of the gain. If the fund loses money, investor will still lose the fee and will make negligible tax gain.

No wonder why Tower's FUM has shrunk (excluding the kiwisaver).

nosolution
10-06-2011, 03:36 PM
some interesting price action today. Why?

nosolution
14-06-2011, 02:22 PM
Is it time to cut my losses on this one? I purchased it a while ago on fundementals when it seemed pretty cheap. This was before the CHCH earthquake. After the action today, I feel like it might be time to just suck it up and pull the plug.

CJ
14-06-2011, 07:24 PM
Is it time to cut my losses on this one? I purchased it a while ago on fundementals when it seemed pretty cheap. This was before the CHCH earthquake. After the action today, I feel like it might be time to just suck it up and pull the plug.I was getting ready to sell, wanting to get out in the 1.80's, then yesterday happened.

And the govt keeps calling them 'new' earthquakes - good for the reinsurers but not the insurers (can anyone explain how this is good for the claimants - I assume they have to pay a new excess each time - is it becuase the subsequent damage wouldn't be covered?)

Jim
20-06-2011, 06:47 PM
I think TWR will have more to fall before it will settle down

BIRMANBOY
20-06-2011, 06:58 PM
I'm no expert on the insurance industry but my "common sense" would tell me to ride it out. There cant be too many other industries that have the "luxury" of having a bad year, increasing the selling price of its product the following year to cover its losses and more and having a captive audience still needing its services.
PS..if it continues its "panic mode" I would be looking at buying in at 1.40

RRR
23-06-2011, 06:04 PM
Chch earthquake total costs now $22-31 million.

Marilyn Munroe
26-06-2011, 08:22 PM
Tower have claimed that they are not liable for the full cost of replacement for clients in the Christchurch Red Zone where but for the Red Zone abandonment they could have repaired the damage for less then replacement.

Once upon a time in Merry Old England there were a large number of big fires.

Because the houses were densely packed together built of timber roofed with thatch, and firefighting depended on yokels throwing buckets of water on the conflagration, the authorities often demolished houses in the path of the fire to create firebreaks.

This lead to interesting arguments about insurance cover. Here is how it played out;

Policy holder: My house was damaged in a fire, I am covered for fire. Pay up.

Insurer: No your house was demolished, not burned in a fire. We are not paying.

Judge: The house would not have been demolished but for the fire, therefore it is
fire damage. Pay up.

This is called in highfalutin lawyer speak "proximate cause."

Let us go to the present day;

Policy holder: My house has been destroyed as a result of an earthquake, I have earthquake replacement cover. I am going to build elsewhere. Pay up.

Tower: No your house was demolished by Jerry Brownlee driving a bulldozer. We will only pay for the cost of repairing your house before it was demolished.

Judge: ????????

Maybe Towers opinion as to the extent of its losses is wrong. Maybe a judge will have to decide. Maybe if you are covered by Tower and are in the Red Zone you should talk to a lawyer before agreeing to any settlement from Tower.

Boop boop de do

Marilyn

CJ
27-06-2011, 07:58 AM
Policy holder: My house has been destroyed as a result of an earthquake, I have earthquake replacement cover. I am going to build elsewhere. Pay up.

Tower: No your house was demolished by Jerry Brownlee driving a bulldozer. We will only pay for the cost of repairing your house before it was demolished.

Judge: ????????

Maybe Towers opinion as to the extent of its losses is wrong. Maybe a judge will have to decide. Maybe if you are covered by Tower and are in the Red Zone you should talk to a lawyer before agreeing to any settlement from Tower.The govt isn't kicking them off the land (which could invoke your proximity clause), They are making an offer to buy the property. You have the choice to remain on your property, in which case the insurer will pay for the house to be replaced.

I think this is why the govt announcement took so long - they were figuring out the legalese with the insurers. If they have worded it as a compulsory acquistion, then it would be different.

Jim
06-07-2011, 07:20 PM
I think it still a while before the share price will reach a trough at about $ 1.40

JemT
09-07-2011, 10:53 PM
I would agree with the above- doing a most conservative valuation based on cash flows gave a value somewhere around $2.20, even after taking into account a 20% increase in reinsurance expense and subtracting $30m of christchurch costs.

RRR
10-08-2011, 07:36 PM
I feel sorry for the GPG folks who want to sell their stake - the share price keeps going lower for one reason or the other. Me not in a hurry to buy.

_Michael
27-10-2011, 04:10 PM
TWR on sharp nose dive with no new updates to market over the last week. Hopefully no new spiders in the closet. Any ideas?

Hoop
27-10-2011, 07:06 PM
There's a few new TA spiders Michael.... a good chance the 1.25 support will fail.

http://www.imageurlhost.com/images/3plq2bfutsftnicwcfeu.png

_Michael
27-10-2011, 07:16 PM
Thanks Hoop

That does not look pretty.

With net tangible asset backing at $1.50 per share you have to wonder what is going on.

There seem to be doing OK with the their insurance underwriting but I do wonder how conservative they are with the substantial investment float.

Looking through last years they seemed to hold quite alot of unrated or "junk" rated bonds for example. And in the last interim report there was a massive (albeit unrealised) decline in financial derivatives to the p&L.

They could take a lead from QBE and go for highly rated corporate bonds.

I am not sure what else could go wrong with them at the moment.

They could lose their status as default Kiwisaver provider which would be problemtatic as they would have no competitive advantage in that area. The govt has flagged already that this could happem - however in saying that the investment business is valued at zero pretty much currently as the insurance business must be worth $1.80 per share anyways...

Or else maybe GPG selling down? Would have thought they would hang around and look for a buyer of the whole company....

RRR
27-10-2011, 08:36 PM
GPG's intention to sell its stake (35% - that is huge) is what concerns me the most as a retail investor. It is and will be a forced sale and hence they will have to sell at a discount - they sold TUA at a discounted price! Tower buying back 15-16% of GPG stake with their cash surplus (?) would be nice - just hoping.

_Michael
28-10-2011, 06:41 AM
GPG's intention to sell its stake (35% - that is huge) is what concerns me the most as a retail investor. It is and will be a forced sale and hence they will have to sell at a discount - they sold TUA at a discounted price! Tower buying back 15-16% of GPG stake with their cash surplus (?) would be nice - just hoping.

That makes perfect sense RRR. You are right.
Figure they are holding onto cash in case they succeed in bidding for AMI.
Although get the feeling one of the Aussies might come out in the lead on that one. (A certain Aussie insurer that is raising capital on the NZ debt market for example...)

whirly
09-11-2011, 12:57 PM
Tough to call at the moment Belgarion. Previous resistance at 150 might now become support but long term TWR is in a 10 month downtrend and needs to breakthru 157-160 to end that and if it fails to move through this point the downtrend will remain intact. Volume hasn't been that high and I think "managing risk" are the keywords at the moment.

I am no TA expert by any means so welcome others opinions. I also just use free version of Inc. Charts so the red line is yesterday and today's action.

I could have added all sorts of other indicators but I don't see the need at the moment.

W.

3687

Hoop
10-11-2011, 09:38 AM
Big jumps in sp. Any TA experts got a view as to whether this likely to be sustained. I've been buying the recent dip and was thinking about booking some profits (managing risk is the term I'd use if the IRD was asking) before the AR which will be oaky but not spectactular.

Hi Belg,

My last chart showing a TA break warning turned out to be a bear trap and in hindsight an excellent (but against the odds) bottom buy...oh well missed that opportunity... dems the breaks.

The sp tested and respected the primary downtrend line yesterday. ...Notice how it is hugging the top Bollinger band (purple)...a short term event unless a rare prolonged sharp upturn trend occurs..... this + continued respect of the MA200 (not on chart)/ primary trend line may result in a slipping back ( a common pullback event...chartwise) into the middle of the bands (purple) to test the 1.50 support or numerous mini supports in the 1.40-1.50 range. However expect another assault at the primary trendline soon if the TA indicators stay positive.... . Long term investor buy signals haven't fired yet but are close, the Primary downtrend line is around 1.57 and MA200 at 1.58.

The only scarey thing about this chart is the sp is in gap territory...a two edge sword...but so far things look positive although as Whirly points TWR is still in a long term downtrend....but this primary bear downtrend is under threat.

Edit: ...I've just noticed a short/medium-term support/resistance at 1.55 (not drawn in on the chart)

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR09112011.png

Lizard
26-11-2011, 08:17 AM
Hi Belg,

I keep meaning to have a look through Tower and Suncorp on the same sort of logic. Whoever grabs AMI probably gets a good share of market too. With the huge increases we've seen in premiums (and more to come), there has to be some profit in there somewhere...

iceman
09-12-2011, 06:38 AM
NZ Herald reporting today that Tower, Suncorp, IAG and Berkshire Hathaway are on the shortlist to buy AMI with a decision expected within a month. This is becoming increasingly interesting with Buffett as a contender !

Hoop
09-12-2011, 11:16 AM
Update from 10th Nov post #276
A month ago TWR was threatening a break out...........but ...... a day after I wrote up that chart it turned to custard...it respected the down trendline + MA200 at $1.55 - 1.57 area ,,, sell signals appeared and the price went back down briefly to retest and respect its 135 support...now TWR seems to be going back up again..................overall result a 135 - 155 trading range formation has developed.

With some interest being focused on insurance companies regarding the extra monies from increased premiums but no unusual movements in the shareprice......a deeper analysis sees the OBV and other accumulation/distrubution TA indicators sensing a slow accumulation however not great enough to effect an increase in share price...This small divergence activity is enough for me to stick TWR on my watchlist...However TWR seems very prone to Global market shifts atm ,,, the bad night on Wall St has dropped the price to $1.41 down 2 today as I write.

Notice that there is another factor coming into play.... the down trendline is entering the trading range area, this may or may not exert some sort of downward pressure on the price ....it is very possible though that the price could break the down trendline but stay within its trading range (status quo).
The Bollinger bands squeezed last friday with a minimal or no trend change which is a bit unusual...maybe too early to tell yet.

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR07122011.png

macduffy
09-12-2011, 12:24 PM
NZ Herald reporting today that Tower, Suncorp, IAG and Berkshire Hathaway are on the shortlist to buy AMI with a decision expected within a month. This is becoming increasingly interesting with Buffett as a contender !

Just to muddy the waters even further there was an article in the AFR a few days ago that a rumour was circulating that Wesfarmers was considering making a takeover for IAG to bolster its insurance business. Apparently this is not the first time that this has been around but the AFR described the rumour as "an oldie but a goody".

No direct relevance to TWR or AMI of course but it wouldn't take a great leap of imagination to see WES looking to expand their already significant interest in NZ.

percy
09-12-2011, 12:30 PM
Update from 10th Nov post #276
A month ago TWR was threatening a break out...........but ...... a day after I wrote up that chart it turned to custard...it respected the down trendline + MA200 at $1.55 - 1.57 area ,,, sell signals appeared and the price went back down briefly to retest and respect its 135 support...now TWR seems to be going back up again..................overall result a 135 - 155 trading range formation has developed.

With some interest being focused on insurance companies regarding the extra monies from increased premiums but no unusual movements in the shareprice......a deeper analysis sees the OBV and other accumulation/distrubution TA indicators sensing a slow accumulation however not great enough to effect an increase in share price...This small divergence activity is enough for me to stick TWR on my watchlist...However TWR seems very prone to Global market shifts atm ,,, the bad night on Wall St has dropped the price to $1.41 down 2 today as I write.

Notice that there is another factor coming into play.... the down trendline is entering the trading range area, this may or may not exert some sort of downward pressure on the price ....it is very possible though that the price could break the down trendline but stay within its trading range (status quo).
The Bollinger bands squeezed last friday with a minimal or no trend change which is a bit unusual...maybe too early to tell yet.

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR07122011.png

Thanks Hoop,
I too have TWR on watch list,so have found your chart and comments timely.

macduffy
16-12-2011, 11:23 AM
So TWR has lost to IAG in the bid to buy AMI.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10773584

Hoop
16-12-2011, 12:01 PM
So TWR has lost to IAG in the bid to buy AMI.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10773584

Hasn't affected the share price yet.. which is looking good @ 1.53

POSSUM THE CAT
16-12-2011, 12:28 PM
Hoop If IAG runs AMI like some of the other companies in its stable seem to be run. TWR will have a lot of AMI policy holders shifting camp

Halebop
16-12-2011, 01:31 PM
Hoop If IAG runs AMI like some of the other companies in its stable seem to be run. TWR will have a lot of AMI policy holders shifting camp

I suspect they will gain very little. Tower have gained very little traction in the general insurance market over a long period. They can't attract or retain good people, their processes are awful and their customers know it. AA Insurance will be the winner in the direct market - they have already been stealing market share from AMI, Tower and State. IAG will inevitably rebalance AMI pricing to a sustainable level and AA Insurance will benefit. Without some game changing talent or event, Tower's best hope is to sell out of general insurance.

POSSUM THE CAT
16-12-2011, 06:34 PM
Halebop have you ever had experience of claiming off AA insurance?

Halebop
16-12-2011, 06:42 PM
Halebop have you ever had experience of claiming off AA insurance?

Yes but that isn't the way to work it out. I've seen the results of third party surveys of direct underwriter customers using acceptable methods like NPS.

When people say "I made this claim and my experience was shoddy" they are often referring to something that happened in 1986. The exerience needs to be contemporary and the sample needs to be significant. My experience of ten years ago probably doesn't give the same confidence as the experience of 1,200 customers 3 months ago. Better yet to see 10 years of large samples trended out...

Hoop
24-01-2012, 11:19 AM
Sheeesh...To think a nearly bought in around the Christmas break at 1.50

Lizard
24-01-2012, 11:27 AM
Sheeesh...To think I nearly bought in around the Christmas break at 1.50

... and I did.... :(

Fortunately small position just to get a feel for it. Not sure what is behind the fall yet, but looks a bit ominous.

percy
24-01-2012, 11:51 AM
I have them on watch list.What has stopped me buying is not so much my concern for the insurance business ,but more of a concern about the return their "float" is earning in difficult markets.

POSSUM THE CAT
24-01-2012, 11:52 AM
Maybee they were hoping they were going to buy AMI insurance

Jaa
24-01-2012, 11:57 AM
Gaynor also came out on Saturday with this zinger about GPG being unable to flog Tower for $2.


For example, is it holding out for $2 a share for Tower instead of selling its 35 per cent stake at around current market levels?

macduffy
25-01-2012, 12:04 PM
Well, "everyone" should also know that the insurance industry's returns on their premium income float has also been hit by lower returns from their bond investments. And that interest rates don't look like making an early upward movement.

TWR's SP is just following the trend - see QBE for example.

macduffy
25-01-2012, 12:17 PM
I appreciate that but this was already reasonably well known over the last - what, 6 weeks maybe 3 months?

Yes, and TWR was trading around $1.30 in late October/early November before making a recovery - of sorts. Market sentiment ebbs and flows of course and QBE's recent downgrade announcement has caused the current "ebb" - will TWR be similarly affected? At least, that's my reading of the situation.

winner69
08-02-2012, 11:34 AM
Sounds like GPG throwing their weight around and telling a director not to worry about coming into the office on Monday

Good stuff .... shareholders getting involved ... but in thsi case I'd say it will all end up in tears for the other shareholders .... so are GPG the bad boys?

Mind you with the NAV of TWR sinking the quicker they can get rid of their interest the better

The BOWMAN
05-03-2012, 12:24 PM
I noticed that there was a huge volume of TWR being traded on Friday. Not quite sure if it is incorrect data being shown or some insider traiding is taking shape. Has anyone else noticed it?

_Michael
06-03-2012, 06:44 AM
I noticed that there was a huge volume of TWR being traded on Friday. Not quite sure if it is incorrect data being shown or some insider traiding is taking shape. Has anyone else noticed it?

Yeah also noticed the volume and price moving steadily upwards on no news.

Looks to me like a takeover bid must me coming together. Any bets as to when and how much?

I would say maybe late this month @ $2.00

Balance
06-03-2012, 07:26 AM
Capital return on the way?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10784181

Hoop
06-03-2012, 10:21 AM
Tower broke out of it's trading range late last week and smart money came in.

The fasinating thing about TWR is its strong historical respect to it's Support and Resistance (S&R) levels which gives some comfort to investors when it comes to enter and exit.
So...with this S&R history, it comes with no surprise that eventually a trading range formation would happen.

This trading range is called a completed Rectangle bottom formation which after a break out has only average predictability depending on many variables. In TWR's case a gap breakout increases the chance to reach its target price of 1.75 to 85%..however the pre-formation spike is a negative and lowers that 85% chance, and especially that 1.65 historic resistance level (my biggest worry) but the NZX index being in a cyclic bull market increases that chance up again .....so conservatively a chance of 65-70+% to reach 1.75. (****Bulkowski 85% chance to reach 1.72 for basic KISS method)
Pull backs occur 53% of the time so there's a slightly better than even chance that on its way to meet its 1.75 investor target price**** the price will fail the first time to breach 1.65 resistance and fall back (pull back) to test its new 1.55 support...this gives the late (tardy) TA investor (me!!) a second chance (53%) to enter.
Thats the chart formation theory side of things....now we still and wait for the practical side to play out :mellow:.

Note that the investor target price 1.75 is just a mathematical thing usually a 70+% chance of reaching that area for rectangles in a bull market... sometimes there is no resistance (slight resistance in TWR's case) in that area so it should not be seen as a magical barrier....often it keeps going up past the target price.... or 30% of the time it won't make it.

**** 1.72 target price using BUlkowski's latest formula ...(see Bulkowski's the pattern site) (http://thepatternsite.com/rectbots.html)
http://i458.photobucket.com/albums/qq306/Hoop_1/TWR02032012.png

Halebop
08-03-2012, 10:57 AM
my recent computershare registry notice shows it took 38 seperate trades (many of only 1 share) to complete the sale of my 5000 tower shares. This all took place in the one day. Is this a board broker or is there another answer.

Not a bored broker but instead probably a computer programmer - Algorithmic trading.

Hoop
01-04-2012, 09:32 AM
Something is up ... looks like distribution ... but no SSH notices as yet ... Any guesses?

Hi Belg
From the chart below
Even though there's a loss of momentum pulling the price back down, it seems to be still a slight increase in accumulation...not distribution. (see the blue !! )

The chart is an update from a month ago it's a little messier due to the inclusion of the purple Bollinger bands and its related MA20 line. I've temporarily added these bands as they are narrowing indicating either a change in the rate of trend or change in the trend itself....atm it is in a short term downtrend.

Overall the TWR chart is TA healthy The target price 1.75 arrived early and now TWR is taking a breather (target sellers??).
The TWR price has to fall below 1.55 to start any worries...

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR30032012.png

Hoop
03-05-2012, 11:20 AM
Something's definitely up!

No significant volumes since the bootom in 2009 and now big volumes going through in the last few months.

GPG action? Market leaking? All and any views appreciated.


This seems to be a worry time Belg.
Normally with larger than normal volume it's usually a rush to get in (accumulation) or a rush to get out (distribution).
My charts have three accum/dist indicators A/D OBV and Twiggs MF all of similar makeup thus all showing neutral to slight distribution.
Large volume with near equal number of buyers to sellers ....Hmmmm strange

TA wise TWR has reached a critical conjunction area...All the ducks have lined up around that 1.65 area.
Some sell signals have appeared a small period event formation (sys triangle) breakout downwards near its apex adds to the uncertain sell signals.

Belg ...looking to jump in with that volume increase/ at a critical conjunction/indecisive investor behaviour atm.. may not be the wisest of moves ..... a gamble similar to a toss of a coin...eh?.....
...unless we can find out who's doing the buying and selling...somtimes abnormal buying/selling strategies can warp TA signals especially with illiquid stocks.

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR01052012.png

Snow Leopard
03-05-2012, 11:45 AM
Something's definitely up!

No significant volumes since the bootom in 2009 and now big volumes going through in the last few months.

GPG action? Market leaking? All and any views appreciated.

TTTSSS or Tiger Technical Trading Share Scanning System declared this a Buy on the 5-Mar-2012 but is currently waving Yellow flags around and deeming TWR as Hold - Weak.

Below $1.60 would take it to Really Worrying and above $1.75 to Sleep Easily.

Having said all that I do not currently own TWR and there may be bugs in my software :ohmy:

Best wishes
Paper Tiger

The BOWMAN
04-05-2012, 08:34 AM
Hi Hoop, what software do you use to generate the charts you had? Or did you add the annotations yourself?


This seems to be a worry time Belg.
Normally with larger than normal volume it's usually a rush to get in (accumulation) or a rush to get out (distribution).
My charts have three accum/dist indicators A/D OBV and Twiggs MF all of similar makeup thus all showing neutral to slight distribution.
Large volume with near equal number of buyers to sellers ....Hmmmm strange

TA wise TWR has reached a critical conjunction area...All the ducks have lined up around that 1.65 area.
Some sell signals have appeared a small period event formation (sys triangle) breakout downwards near its apex adds to the uncertain sell signals.

Belg ...looking to jump in with that volume increase/ at a critical conjunction/indecisive investor behaviour atm.. may not be the wisest of moves ..... a gamble similar to a toss of a coin...eh?.....
...unless we can find out who's doing the buying and selling...somtimes abnormal buying/selling strategies can warp TA signals especially with illiquid stocks.

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR01052012.png

Hoop
04-05-2012, 01:20 PM
Hi Hoop, what software do you use to generate the charts you had? Or did you add the annotations yourself?

Hi Bowman.
I add the annotations (trend/s&r lines , patterns) manually...using Paint.net (its an open source software) over incrediblecharts free version. I then save the annotated chart to my pictures in my computer for uploading to the ST forum via photobucket.
Adding to the charts manually is time consuming ...not the actual drawing of the paint art work but analysing the charts to find various formations (for example the possible patterns). Even drawing a simple trend line can create issues. Do you draw a trend line including a freak EOD flash crash point? do you add intraday lows and high points to your trend line.... when to do it when not to do it methods.....

Looking at a published chart on a forum looks very simple because things rightly or wrongly are highlight for you...but....analysing raw charts takes practice of many months to years to finally get an eye for it.. your basic requirement is the ability to recognise all the possible chart formations and tell your brain to concentrate on finding them and be careful to realise that if there is more than normal visual information on a chart your human mind may automatically blind out parts of visual data so to cope with the mental processing****...(you are not aware of this happening)....

If some charting programs have simple pattern features built in these would be of tremendous help. Unfortunately the more sophisticated chart programs work off servers and most are not free. Working with servers can be a problem because if they don't pay their domain bills they get shut down and all your stored information is lost. I see that we can't connect to with imageurlhost atm????
Also a problem is many chart trading programs have limited, incomplete (e.g no volume) to no available NZX data at all...

****At what point is your Mind blocking out visual data...try this ultra simple very low visual test first...this one is very easy:)

How many f 's in the bold type sentence below

finished files are the result of years of scientific study combined with the experiance of years.


One would assume this low visual info (the above sentence in bold type) should not cause the human mind to overload and block out any visual data...however the chart shows a third got the answer wrong.
Go here (http://www.quibblo.com/quiz/2jEszbG/how-many-fs-are-in-the-following-sentence) and click the answer. Once you know the answer and reread the sentence you instantly see all the f 's and you feel foolish at just how easy it was,,If this was too easy try something harder and find the your own personal limit,,,,,,,,,,,,,,,,,,,,reading charts is similar, once you know for example all the available patterns possible your brain knows what to look for and it become easier to spot patterns on a chart.

Get to know chart patterns here at http://www.chartpatterns.com/

macduffy
04-05-2012, 03:12 PM
I'm not sure that anything's up with TWR - other than that the whole world knows that GPG is in wind down mode and that their TWR holding will be sold sooner or later. It could be that one or more interested parties (insurance companies?) are building positions just in case whoever buys GPG's stake decides to go the whole hog and mount a takeover bid.
Pure speculation, of course. Any other wild guesses out there?

Hoop
07-05-2012, 07:36 PM
... But Hoop ... What's up with TWR?!? ... :)

No idea!!!

What scenario's exist with high volume period, little movement in price until today (downwards)?****, small accumulation since Wednesday 2nd (not shown on my previous chart) maybe not after today though..neutral momentum....
Only two I can think of Macduffy mentioned one . The second is swapping accounts via the market.
Maybe, just maybe an outside third factor.. 7 May is provisional tax day and is forcing sellers with plenty of buyers in the wings... but doubt it.

**** the best way to effect a change is to buy some shares and then watch them fall...bought a token amount (toe in the water 4000) for 166c at 1.40pm today then watched it drop to 164 20 mins later...It's been one of those years so far, I can't seem to do much right (except for SUM and swapping some of my cash NZ$ to US$).

Belg..Time is the key ingredient with TWR if no-one is going to tell us anything (announcements)...hopefully we may know something within 3 weeks..half year results due??

Snow Leopard
07-05-2012, 08:05 PM
...the best way to effect a change is to buy some shares and then watch them fall...bought a token amount (toe in the water 4000) for 166c at 1.40pm today...

You bung up all these fancy technical graphs showing it going nowhere and then you do WHAT?

It is a good job Phaedrus is not here.

I hope it works out for you :)

best wishes
Paper Tiger

Hoop
07-05-2012, 09:02 PM
You bung up all these fancy technical graphs showing it going nowhere and then you do WHAT?

It is a good job Phaedrus is not here.

I hope it works out for you :)

best wishes
Paper Tiger

:)Thxs PT
yeah ... I hope P isn't lurking either....could be archiving all our mistakes then come back to clobber us with them.....heavens forbid :scared:

The BOWMAN
10-05-2012, 03:24 PM
This is truly mysterious. TWR keeps churning out huge volumes frequently but price is going no where. is someone doing the selling and buying all by him(hel)self for fun and keep the broker rich?!

Lizard
10-05-2012, 04:15 PM
If it were GPG selling ... What's the longest they can wait before telling the market?

Supposed to disclose a 1% change in holding "as soon as the person knows, or ought to know, that the movement has occurred" (Securities Market Act 1988)

CJ
11-05-2012, 10:03 AM
So its not GPG selling down ...

I'm guessing someone else is building a stake so that when GPG do sell - possible firesale - they'll make the takeover offer as, with GPG's, they'll have 50% or possibly more by then.They cant go abouve 5% without notifying.

It could be speculative buyers in anticipation of selling into a higher takeover offer. I know there are funds in the US that specialise in that (look for companies that expected to be taken over). Given this is well sign posted, you should expect someone is doing it.

winner69
11-05-2012, 10:48 AM
They cant go abouve 5% without notifying.

It could be speculative buyers in anticipation of selling into a higher takeover offer. I know there are funds in the US that specialise in that (look for companies that expected to be taken over). Given this is well sign posted, you should expect someone is doing it.

so nothing really going on then belg .... nobody getting over zealous .... just normal buying and selling eh

Hoop
16-05-2012, 10:30 AM
Still accumulation not distribution. Belg. (Orange ringed Indicators)

Mondays Slim down Chart below ...should really have that 1.65 long term support line drawn in...There is also that 1.62 support there as well (see previous chart for more info)
The Bollinger band squeeze is warning of a shareprice trend alteration is near.

http://i458.photobucket.com/albums/qq306/Hoop_1/TWR14052012.png

Hoop
16-05-2012, 10:55 AM
So the charts say top-up? .... What do the fuindies say?

This fundie's head says top-up but the gut just isn't playing ball ...
I reluctantly bought a token amount at 1.66 on the 7th May .........couldn't get myself to go fully in ...my gut feel is the same as yours Belg........

Snow Leopard
16-05-2012, 11:11 AM
I can come up with a few valuations for TWR.

From the books and a look forward into the fog that is the future: $1.75 (Range $1.70 - $1.85). :mellow:

For a full take over: $2.45.:)

However I do not see a great case for anyone wishing to buy GPG stake's for much more than $1.85. :mad ;:

best wishes
Paper Tiger

winner69
21-05-2012, 06:58 PM
Ah ha! ...

Devon Funds Management Limited buying and now have 5.09%

http://www.directbroking.co.nz/directtrade/dynamic/announcement.aspx?id=3083659

You work there W69? ;)

No Belg

Devon not exactly making their investors rich with their carefully selected NZ picks if you look at their recent performance .... but they be doing OK collecting the fees on the way through eh

winner69
22-05-2012, 03:55 PM
Belg .... looking at Devons largest investments it would appear YOU work there ... maybe their portfolio manager

slimwin
22-05-2012, 04:34 PM
I haven't been following this thread but the feckers should be doing well. My house insurance went up 30% last year and today I get a bill with a @50% increase. Add that onto a 7.6% rates increase and I'm feeling "postal" right now.

slimwin
24-05-2012, 05:30 PM
Cheers Belg.

Nobody wants the rest of NZ to suffer but there is a bit of talk going round wondering what the insurance increases are around the country. No doubt it'll be a close up episode one day! The insurance companies are effectively operating in a monopoly down here at the moment as you can't change providers.

Pretty sure there'll be alot of people out there that can't afford 100% increase in the last two years. Coupled with the rates increase. Good thing the council are going to spend 91 mil getting rid of our functional one way roads. I would have thought the convention center could await a couple of years till theres actually some accomodation available too.

But i digress...

Lizard
25-05-2012, 09:14 AM
Result looked on track to me. Should be worth somewhere above that $1.79 NAV?

(My valuation $2.36, but not expecting that to happen while the markets are wobbly)

winner69
25-05-2012, 09:16 AM
You'd be pleased with the headlines eh Belg

I don't know what to make of it but the difference between last year and this year is all down to the increased investment income ....... nothing to do with claims or the cost if reinsurance or all that sort of stuff

Just as well markets have been a lot better this year than last year

Just an observation ..... P&L for insurance companies are not worth much anyway .... change a few assumptions in the valuation of liabilities or future income and hey presto anything can happen

The markets will like it anyway

Lizard
25-05-2012, 09:54 AM
Okay, so the detail then...

Growth in FUMA of $150m or 3.8% (although not reflected in fee income). About $90m of the increase comes from Kiwisaver.

Growth in gross premium of $25m or 5.6%.

Increase investment in fixed interest securities and decreased equities yoy.

Health insurance improvements from lower claims relative to premium.

Life benefited from lower policy-holder maturities relative to premium.

General insurance gross premiums up by $7m (6.6%). Offset by increase in reinsurance. No payment for re-instatement of catastrophe reinsurance in this period ($14.9m cost in 2H11 and $2.7m in 1H11). Claims from Dec-11 quake below reinsurance excess. Result remains relatively lower profit than pre-2010, with $5.5m of catastrophe costs this period.