The week's winners

The week's winners

  • Bradstock up 15%
  • Royal & SunAlliance up 5.2%

    The week's losers

  • Culver down 11.1%
  • Highway down 10.1%

    The sales have come early.

    Or so the insurers planning rights issues would have us believe.

    Legal & General hit headlines with its £786m offering of 13 new shares for every 50 already held, at 60p.

    Zurich announced its own £1.3bn rights issue last week and latest in line is Hiscox, with a one-for-two offer to raise £110.5m.

    All the insurers insist they need the money to take advantage of the hardest market in years, rather than repair their balance sheets.

    As, no doubt, will Royal & SunAlliance (R&SA) when it launches its own much-trailed capital raising exercise.

    But will R&SA shareholders be as keen to hand over more cash as those of its competitors?

    Trevor May, analyst at Salomon Smith Barney said Legal & General's pricing, at a 47% discount to its shares, showed there is not an inexhaustible supply of capital out there .

    "It says to people like R&SA and anyone else planning the same thing that they had better get their skates on," he said.

    David Wharrier, director of insurance at Fitch ratings agency, said it had implications for R&SA's pricing.

    He said R&SA's pricing would have to reflect the relative weakness of its balance sheet compared to the AAA-rated L&G.

    When R&SA's share price took a bounce late last week only the cruel would have suggested it had anything to do with reports suggesting beleaguered chief executive Bob Mendelsohn was in line to exit, with a £1m payoff.

    Meanwhile both Fortis and AXA were tipped by Commerzbank. Both groups were up about 4.8% on Tuesday before this column went to press.

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