You appreciate, I trust, that those 20%/$200m figures do not refer to 20%/$200m of Challenger's actual Revenue accruals, but to a 20%/$200m lower level of growth in the sales of one of Challenger's numerous products?
For context, Challenger currently has close to $80bn of assets under management, which has been growing at a rate close to $7bn pa over the past decade. So for that $7bn pa growth run rate to be reduced by $200m, which is what the UBS analyst is warning, is akin to a rounding error; at best it is within the analyst's normal forecasting accuracy limitations, anyway.
Besides, as the AFR article goes on to say, Labor's proposed crackdown in cash refunds for excess franking credits, would increase demand for annuities. And I'll wager that the effect of that - if Labor does get to get its way, which it will - would easily more than offset the $200m lower sale of a single product about which the UBS analyst is wringing his/her hands.
That's the beauty of a large, diversified asset portfolio... The Laws of Swings and Roundabouts come into play.
There are many things to worry about when it comes to investing in publicly listed securities.
Whether a company with $80bn of assets increases that asset base by $200m more or less in any given financial period, is not one of those worrisome things.
But, hey, talking about it like it is, might generate some brokerage.
CGF Price at posting:
$12.14 Sentiment: None Disclosure: Held
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