Asx Draws A Blank From Nrma About Rising Share Price

Sydney Morning Herald

Friday November 17, 2000

Anthony Hughes

NRMA Insurance has offered no explanation for its share price jump from $2.81 to more than $3 in the past week, putting the shares much higher than most market valuations ahead of the annual meeting later this month.

But, with a reassessment by investors of this week's surge in the insurance sector, NRMA yesterday fell 8c to $2.89, AMP rose 1c to $18.93 and QBE dipped 28c to $9.55.

Helping NRMA in the past week, though, has been the move by investment bank UBS Warburg to increase its valuation on the general insurer from $2.90 to $3.10.

But most analysts retain valuations substantially below this figure. JB Were & Son, for instance, has maintained a valuation range of $2.40 to $2.70 on the shares since the listing in August.

As NRMA listed, the range of valuations was mostly between $2.60 and $2.80 a share, with only slight adjustments since. NRMA members who bought more shares in the float paid $2.75 a share, the same price for those who sold them into the institutional bookbuild.

NRMA Insurance will hold its first annual meeting on November 28, when shareholders will be asked to approve a grant of share rights to managing director Mr Eric Dodd.

One analyst said the insurance sector had risen in the past month as many investors recognised the improving premium rate cycle, but weak investment markets were a drawback for the outlook. This is particularly important for NRMA, which is heavily dependent on investment income for its overall profit result.

After an ASX query about the past week's rise, NRMA group secretary Ms Gaye Morstyn said it was not aware of any special reason.

Similarly, AMP was also quizzed by the ASX about its strong share price and responded by saying recent reports about the sale of its general insurance operations were speculation.

© 2000 Sydney Morning Herald

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