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The latest ups and downs on the stock market

There’s still fat to cut from the Aviva bone, analysts believe.

Investment research expert Execution has upgraded Aviva from ‘hold’ to ‘buy’, having said it believes that the insurer could drive another £200m of cost-savings from back office and property and casualty.

Analyst Joy Ferneyhough said: “Management finally appear to have taken a more aggressive stance on tackling capital and cost inefficiencies within the business.

“Recent actions on Australia, Delta Lloyd and the UK estate, together with the launch of the ‘quantum leap’ strategy in Europe, have left the £500m cost-savings target from H108 looking lacklustre.”

Ferneyhough continued: “We estimate a further £200m could be achieved in 2010, which drives plus-10% upgrades to current EPS [earnings per share].”

Execution believes ‘fair value’ for the business is 550p, compared to the insurer’s current price of 420p.

Meanwhile, the drama at Omega, the Bermuda-based Lloyd’s insurer, has done little to upset the share price, which continues to hover at the 120p mark.

The insurer could face a vote from shareholders, who want to replace the chairman and add five new directors.