By Saxon East
The Dubai debt crisis sparked a share sell-off in insurance blue chips as investors lost their risk appetite. The worst affected were insurers with both general and life businesses.
Aviva and Legal & General suffered large one-day falls on Thursday, the day after state-backed property developer Nakheel asked for more time to repay a $3.5bn (£2.1bn) bond. Aviva’s shares fell from 395p on Thursday to 375p at the time of writing on Monday. Legal & General, which has a home insurance arm, dropped from 85p to 78p.
Bank-owned insurers also suffered badly. The Royal Bank of Scotland, which owns the UK’s largest personal lines division, fell from 36p to 33p but eventually rebounded up to 35p.
RBS’s share price is tied to the fortunes of Dubai, as it is the emirate’s largest creditor.
Lloyds Banking Group took the heaviest hit of all, falling 90p to 55p, at a time when it is looking to raise $13bn with a rights issue.
FTSE 100 – 5203.49
FTSE 250 – 8954.86
All-Share – 2655.59
Admiral 1056 = 4.5%
Aviva 375p = -5.3%
Legal & General 75p = -13.3%
Dollar - 1.64
Euro – 1.09
Yen – 142.3
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