From the AFR:
As investors brace for a wild ride, bankers are making sure their clients are ready to test the market as soon as the initial public offering window opens…The latest is QBE Insurance Group, which is understood to be working with Bank of America Merrill Lynch and Morgan Stanley on its $1 billion lenders mortgage insurance (LMI) spin-off.
…It is understood QBE is targeting a deal in the first half of this year and intends to structure the sale through an IPO. Analysts expect QBE will look to offload a 30 per cent to 40 per cent stake.
The LMIs are the unlucky insurers of Australia’s worst mortgages. It is a duopoly, however, so has good pricing power. The other half of the LMI duopoly, Genworth, has done quite well since listing last year but its chart is fading consistently and forming a bearish descending triangle pattern:
Take from that what you will. I’m a little reassured that with the listing and gaining access to capital, the two LMIs won’t need to be nationalised when the property bubble finally bursts. But only a little!
