From Breakingviews: Allianz seems to be succumbing to gravity, and Ryanair and Lufthansa have self-interested reasons to be pessimistic. Plus: RBS finally has a good crisis. Read the latest Corona Capital column
- RBS
It’s an about-turn for the 70 billion euro insurer. Allianz had been fairly optimistic in the face of the coronavirus pandemic, standing by its dividend and share buyback scheme. Its shares trade at nearly 10 times forward earnings, compared with less than 7 times for France’s AXA. The dividend is still intact, but the sheen may come off when Baete gives a more detailed outlook for 2020 in less than two weeks. Shares fell 3% on Friday. Germany’s insurance giant may be succumbing to gravity.
Such projections should be taken with an in-flight sachet of salt. Neither airline is offering guidance for this year, let alone the ones after that. The doom and gloom probably has a more immediate function. Spohr is trying to convince Berlin of the need for a 9 billion euro bailout. O’Leary, who likens state aid to “doping”, needs to justify massive job cuts.
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