Bank savages LogicaCMG

LogicaCMG, the insurance software provider, is overvalued according to banking giant Morgan Stanley.

In a bearish 14-page note to brokers, the bank gave the stock an underweight recommendation and 160p price target, when at the time the stock was at 177p.

The broker said: "The stock is trading at a 5% premium to its European peers. Given this and the portfolio challenges ahead, we see no reason to change our cautious stance."

The bears also mauled Alea after stockbroker Bridgewell took the unusual step of suspending its estimates following Standard & Poor's move to put the insurer and reinsurer on negative credit watch.

"We do not believe that it would be in shareholders' interests to put the company into run-off," Bridgewell explained.

"But clearly, until the rights issue is underwritten this remains a possibility, if shareholders decide that this would be the best way to maximise value in the near term."

As Insurance Times went to press, Alea was languishing at 140p - around its all time low.

On a more positive note, Panmure Gordon turned a buyer on Benfield Group. It reckons the broker is likely to pick up more business due to increased demand for cover following Hurricane Katrina. Benfield is worth around 293p a share.

' Yvette Essen is stock market reporter and insurance correspondent for

The Daily Telegraph