Broker snap: Panmure reiterates buy on Aviva ahead of results

1st Aug 2011 12:45

Panmure Gordon keeps its buy rating on Aviva ahead of its first half results on Thursday 4 August, noting recent press speculation that its Asian assets are on the block."Comments in today's FT which suggest that Aviva might be looking to dispose of its Asian operations should come as no surprise, given that they do not fit in the strategy of concentrating on 12 key areas going forward," said analyst Barrie Cornes."Reports suggesting that former AIA CEO [chief executive officer], Mark Wilson, could be looking to raise private equity support for a bid may or may not come to anything, but we believe that a disposal will occur at some point," he said.Panmure thinks that the valuation of the Asian operation would be worth up to £750m, based on a 2010 embedded value of £600m for the whole of the Asia Pacific region.The broker keeps its buy rating and 528p target price. "We believe that the share price is too low, having been affected by overplayed fears of the impact of sovereign debt," Cornes said.Shares were trading 2.78% higher at 12:44 on Monday.BC