Dow Jones Industrial Average: new records of blue chips

Dow Jones Industrial extinguishes the green light to bear

In brief: Dow Jones and demonstrates the confidence the dynamics of growth. Against the background of past losses Dow Jones Industrial Average rising more than confidently and quickly.

Dow Jones Industrial Average demonstrated its superiority on the U.S. stock market. Trading in the United States on Wednesday 2 June ended growth stock indexes. Investors are actively buying shares of oil companies, which have fallen in price in recent days because of the situation surrounding the oil spill in the Gulf of Mexico. As a result of trade index of “blue chips” Dow Jones Industrial Average rose 225.52 point, or on 2,25% to 10,250 items. The index of wide market S & P 500 closed higher by 27.67 points or 2.58%, at around 1098 points. “High-tech” Nasdaq Composite closed at 58.74 the growth points or 2.64%, at around 2281 points.

Maybe soon we will witness the IPO AIA but first, this “diamond” in the crown of AIG requires cutting. British insurance company Prudential refused to buy the Asian offices of U.S. insurer American International Group – AIG – (AIA Group Limited). This decision was taken by the British company after it failed to reach agreement on reducing the cost of the deal, which was designated earlier to $ 35.5 billion, Chairman of the Board of Directors of Prudential said that “to reach an agreement and failed, so in order to interest the company’s shareholders accepted decision to abandon the transaction. ” The intention to buy the Asian branch of Prudential AIG, reported in March 2010. It was noted that in the case of a successful completion of the deal the British company will become one of the world leaders in the insurance field. On the eve of AIG stated that it intends to depart from the initial conditions of the sale of the Asian unit AIA Group. Thus the attempts of British Insurers negotiate a reduction in the purchase price failed, and the transaction was put in jeopardy. AIG insisted initially articulated by the sum – $ 35.5 billion, and representatives of Prudential acknowledged that the stated price is too high. Previously, Prudential announced that it will offer for AIA only $ 30.8 billion to get the approval of its shareholders. Following the breakdown of the transaction on the absorption of AIA by Prudential, the first glimmer of brighter prospects, which were not always so. Some members of management and ordinary employees of AIA, perhaps relieved by avoiding integration with Prudential. Now they must figure out how to attract potential investors.

IPO promises to be challenging. Volatile markets can not provide firm ground for future placement on the Hong Kong Stock Exchange volume of at least $ 15 billion In July, the Agricultural Bank of China should increase the amount of cash up to 20 billion dollars, several other Chinese banks planned to raise funds. Against this backdrop, the flow of investment capital can be scarce until the end of this year. At the price of accommodation can also bring pressure to bear those factors because of which Prudential was forced to insist on reducing the amount of the transaction. AIA can help themselves, if solve the problems pointed to by Prudential during the negotiation process. The latter is estimated to quickly boost profitability AIA due to correction of a package of products and improve the effectiveness of sales managers. This can to push investors to the idea, and why the current leadership of the company has left things to chance, and whether it could establish a business. Geography AIA for the Asian region is also not the most profitable. The only markets where it has taken a leading position due to business expansion in the past year – this is Thailand and the Philippines, which are among the most politically unstable regions. The positions of AIA in India and China, where the current pairing season is planned to activate growth of the life insurance is not particularly strong. Despite the fact that this is the only independent foreign company in China market, its share has not exceeded 1%. The current leadership of AIA managed to avoid a long process of integration into the structure of the Prudential, but now he faces the task of how to improve the performance of the company, which is 80% owned by the American government. Board of Directors of AIG, among whose members are the governor, two U.S. government, considered that the AIA can do more than the proposed Prudential. It should be noted, however, that CEO Robert Benmoshe very much like that transaction took place. Perhaps he knew that it was better to sell the Asian daughter before it will appear new cracks.

Ukrainian Globalist
2010-06-03 16:27, Economics.

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One comment к “Dow Jones Industrial Average: new records of blue chips”

  1. Nikola Zalupskiy Says:

    A very useful article, as always.

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