Some short positioning, page-29

In my view, the HY result gives me plenty of reasons to remain positive on QBE.

-When this stock was sub $10, it was priced for further disappointment, so a rise towards $12+ only needed signs of stabilisation rather than anything spectacular. A lot of fund managers were underweight QBE because they were worried about further downside, so stabilisation should see continued rotation back into the stock;
- Headline investment returns will be depressed by mark to market losses on existing fixed rate investments as rates rise. However, it doesn't impact the cash generation of these investments as QBE is primarily a hold to maturity investor. Accordingly, a rising interest rate environment is a clear positive for QBE regardless of these non cash mark to market adjustments.

In my view, the asset divestments, rising premiums, rising interest rates and cost saving initiatives should support improving sentiment and further share-price growth over the next few months, particularly as confidence grows in mgt's ability to execute their plans. (and a takeover approach also becomes more likely)