I bought 500 MFC today @ 19.70 (C$). It traded in U.S. as well. Same symbol.
The rational:
1. Manulife is highly leverage to equity market. It has the biggest variable annuity in North America and about 50% of the exposure are unhedged. The rises in stock market will reverse the charges and improve earnings. I also believe MFC will use the strength of the market to hedge more so the earnings will be more stable.
2. All life insurance companies will benefiting from rising interest rates. Most of the premiums are invested in government bonds. So the increase in interest rates are good for MFC.
3. The improvement in commercial real estate will benefit MFC a lot. MFC have 10% of assets in real estate market.
4. MFC is the best foreign life insurance company in China and the valuation does not reflect that.
5. The company raised lots of capital over last year and the balance sheet is strong.
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