Prudential Legal and General Unfounded Capital Rumours

Prudential, Legal and General Unfounded Capital Rumours

Rumours in the city that Prudential, one of the biggest and oldest insurers in the UK was considering raising capital to protect its capital threshold, i.e.  to maintain excess of assets over liabilities, has been denied absolutely by the Pru.

At the same time.  Legal and General, one of the strongest financial institutions in the city, had seen shares prices tumble and suffered the same rumours.  These rumours again were refuted with L&G even confirming that they are not concerned and to reinforce the point of their financial capability, they are still pressing ahead with a £1bn share ‘buy back’ scheme.  In short they are not issuing shares to get people to give them money i.e.  to raise capital, they are using their huge excess of capital to buy back shares to increase the value of shares that remain.

This follows speculation that a number of insurers, whilst not in financial difficulty in the same was as banks, were having to look at the overall value of their businesses as shares prices have fallen dramatically and they all have duty.  

We suggest this is all to do with speculators trying move share price for profit with rumour and speculation.

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