Some time ago a top analyst 'did a job'
on AIA. He predicted a PE of about 23.1 for the current year.
As tourism has picked up since, I am
predicting a somewhat higher profit; however, I will be using his PE and
the $3.14 closing price.
I think that AIA is worth a PE of 25 and as
six months of their business year have passed, I should be paying 25/23.1 *
$3.14 = $ 3.40 per share!
Hugh Webber has already pointed out that Singapore
was anxious to obtain a stake of only 5% and paid $2.90 some time
One reason that the stock has not been able to
achieve much higher prices, is the 420 mill. shares, the company
I estimate that up to 80% are firmly
held and that another 15% will only sell at more than
That still leaves say some 20 mill.shares in the
hands of people willing to sell at between $3.15-$4.0.
I think that Singapore may want
to increase their stake and that they will have to pay at least
$4.50/share for a complete takeover!
If we can keep the $NZ at current levels then
there may be no reason to raise interest rates assuming that the demand
I think that dr Cullen will keep a firm grip
on the money and that should be a plus for this stock and others eg.
However, I don't normally consider AIA as a stock
for short term investment.