There has been a significant increase in the borrow of Amlin (AML). The insurance group’s %Market Cap on Loan (MCOL) rose from 2% to 12% between November 10 and the 29, and has since risen again to 15% today (please see graph). Utilisation has also risen sharply; from 4% to 50% over the same time period. The volume of shares traded in Amlin is double its average, at 20million today.
At the same time as the borrow began to rise, so the share price plummeted; from 330p to 300p today, with an inverse correlation in early December. A report in the FT suggests that marine insurance companies, of which Amlin is a member, have had to pay out a total of $1bn in marine hull claims.
Amlin has the highest %MCOL for the UK Insurance sector. Benfield is second at 12.39% and Jardine Lloyd Thompson Group at 9.3%. Benfield’s share price dropped on October 4 by 4.4% to 290½p as recent takeover speculation faded. The borrow rose from 12% to 13%.
Jardine Lloyd Thompson’s shares slumped 11.5 per cent to 374p on August 1st after the insurance broker's interim figures contained a downbeat assessment on its outlook. A month later, the borrow rose from 8% to 11%. The share price has now fallen further to 300p, and the borrow remains around the 10% mark .
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