us dollar, page-16

We've all read the numerous articles regarding currency parity with the $US. These people didn't pick the financial crisis, they didn't see gold going through US$1200, they didn't pick the currency to fall into the 60's, so what are they now saying about it's fallen into the 80's? Nothing.

The US economy is on a slow mend and money is starting to trickle back. So if the $US continues to hold ground or increase there is only one direction for QBE and that's up (remember the ying and yang thread I started).

Could you imagine the hedging programs this AA+ company would be putting in place with 13 days to their FY09? - Borrow in US dollars (at .25%) for US claims. Transfer the company funds back to $A to get 5%+ interest rates.

How about the GWP numbers that will come through with the currency below 90c?.
30% of QBE's staff are in the US, so the expense ratio converted back will be getting better by the day.
Group combined operating ratio currently at 89% (world leading number), with a target of 88% - will be better.
Group investment yield currently at 3.3% a huge proportion currently held in the US (see above on that).

I haven't even touched on the fact the hurricane season in the US was benign, its re-insurance division and 30% of the Lloyds business is denominated in $US, projected US premium growth in 2010 of 20%, increases of 4% across the world, net debt level below 20%, record first half yearly profit (even with the GCF going on), no bad debt, a lazy $2b for bolt-on acquistions and that 41 of 45 of its businesess are recording ROE of greater than 15%.

Do you think famous US investment Blackrock took long to work out why they should be owning 5% of QBE from last week?

Are any of the broking houses putting a strong buy on QBE?
Of course not, they need to get the institutions onboard first.


P
dyor