JP Morgan criticises investments under new solvency rules
JP Morgan analyst Andrew Hughes forced down the price of Aviva, Legal & General (L&G) and Prudential shares, the Times reported.
Hughes cut his price target on Aviva from 360p to 285p saying he was concerned about its £3.5bn exposure to bank convertible bonds, known as “Tier 2” debt, which new rules may forbid being included in its solvency buffer. Aviva lost 13p to 239¼p.
L&G fell 1.4p to 45.4p after Hughes reiterated his “sell” stance over the insurer’s exposure to corporate bond defaults. He also downgraded Prudential from “buy” to “neutral” and cut his target price from 565p to 400p. Prudential lost 10¾p to 347p.
