Kathleen Chu
Shares of Japanese insurance companies declined after a Barclays Plc analyst lowered his target prices for top insurers, saying that he doesn’t see prospects for further appreciation after shares jumped this year.
Dai-ichi Life Insurance Co. fell as much as 4.9 percent in Tokyo Wednesday, the biggest intraday decline since Nov. 16, while T&D Holdings Inc. dropped as much as 3.4 percent. The TopixInsurance Index was the worse performer among the Topix index’s 33 industry groups, declining 1.9 percent at the break in Tokyo.
“Many companies have already announced dividend hikes or share buybacks and we think share-price assessments largely factor in these initiatives,” Azuma Ohno, an analyst at Barclays, said in the report published Tuesday. “We think the insurance industry is generally missing themes.”
Ohno lowered his target prices for Dai-ichi Life and T&D by 10 percent, and reduced the target price for
Tokio Marine Holdings Inc. by 9 percent. Ohno also cut the target price for
Sompo Japan Nipponkoa Holdings Inc. by 8 percent, while prices for MS&AD Insurance Group Holdings Inc. and Sony Financial Holdings Inc. were lowered by 5 percent and 2 percent, respectively.
Sony Financial declined as much as 5.2 percent and Sompo Japan fell 1.6 percent.
Ohno said that the addition of Japan Post Insurance Co. to the Topix on Dec. 30 may affect other insurers in the short term. While Ohno reiterated his negative rating for Japanese diversified financial companies, he maintained his equal weight ratings for the six insurers.
“We see the risk of the relative performance of existing listed insurance stocks weakening during this period,” said Ohno in the report. “However, we think their relative appeal might improve after the addition of Japan Post Insurance to the Topix.”
--With assistance from Yuko Takeo.
Bloomberg
