news on qbe?, page-18

radioactivewhale

The largest part of this raising 42m shares under the institutional placement has been available for trading for two weeks.

The 14m odd that retail holders will get there hands on will be absorded quickly if some are using it as an opportunity to bring their weighted average down without increasing overall exposure. It may retrace at some point as its been running hard but dumped I doubt.

My read is that the smart money knew QBE would have to raise due to a portion (500m) of their Tier 2 Capital not meeting regulatory capital requirements under the APRA proposals. Therefore the stock was shorted accordingly.

Additionally this rally IMO is all about the yield on US 10 year treasuries rising over 30bd in the last two weeks. QBE has always been a play on a reversion towards the mean yield for US treasuries. Even though QBE has little investment exposure to 10 year bonds the yield curve flattens as it rises have a significantly positive impact on the yield on short term notes.

The size and liquidity of the US treasury market ensures it functions like a moon that controls the fixed interest tide. Rising yields on Treasuries will increase the cost of debt across the spectrum including yields on Corporate bonds that QBE is heavily exposed too.

I can't say when but eventually the cyclical negatives that have pounded QBE down will reverse and propel it forward, the market is starting to take this notion seriously.

I have applied for my 15k that will hopefully - depending on scale back give me a weighted average lower than the current SP. Happy to hold for the long term.