news on qbe?, page-22

On this occasion, David Jones has missed this step and magnified the error by suspending the stock.

From today's Oz

Stock rockets

THE bourse may be unable to break the 4300 barrier, but some stocks have done well -- including QBE, which closed yesterday at $13.59, or 34 per cent above the $10.70 at which it raised $500m late last month.

In the last week alone, the stock has increased by 15 per cent in line with the massive sell-off in US 10-year bond prices, pushing yields up 13 per cent to 2.31 per cent.

Of course, everything is relative, and QBE is only just back to December levels.

But if bond prices continue falling, that is great news for the company for several reasons.

The market thinks the US economy is getting better, which is good for a company with 75 per cent of its business outside Australia.

The fall in the risk-free rate in past years has pushed up the cost of QBE's claims liability, which means it must hold more capital and risk margins have fallen.

Plus the company earns more money because it is long in fixed-income assets, so in total, the bigger the crash in US bond prices the better it is for QBE.