Great Eastern Holding

[weijian]

Thanks Big Toe and ghchua for the quick response. You have given me much food for further thought.

I have to clarify the "simple" in my earlier statement "Would GE be a simple low risk "value" bet for rising interest rates" - It is obviously not simple. It may be an easy bet but it is not simple.

Insurance firms are anything but simple to analyze. Most of its (actuarial) decisions are not obvious to the average joe and has a long tail. But on the other hand, if things are obvious, then the Market is much more efficient...

[weijian]

Great Eastern has a roughly 60-40% portfolio (60% - fixed income/debt, 40% - equities/funds/REITs), if we were to exclude the ~2% investment properties portfolio for a moment.

My personal policies have had the assumed returns and bonus yields consistently reduced in the low interest rate environment for the last decade. With interesting rates rising, my agent has suggested that there will be better yields coming!

Would that be actually a tail wind for GE and its business (better yields --> more attractive returns for customers --> more sticky policies written). Would GE be a simple low risk "value" bet for rising interest rates?

To date, Great Eastern seems to be a net loser (just like many others who are borrowing short term and lending it long for the spread) due to the rapid rise in interest rates.

There has been a big write-down in FY22 to reflect that and Mr Market seems to be very pessimistic about its prospects. Most of the losses are unrealized mark to market losses. Unlike banks who have short term liabilities and long term assets, an insurer like GE has long term assets and long term liabilities. But in the short term, it has to suffer from an accounting perspective, before the tailwind of higher rates actually improves its financial performance.

In summary, does a rise in interest rates bring short term pain but long term gain for a life insurer? But of course, unless we have a good idea on the books (which the OPMI doesn't have), no one really knows how to define the short term and long term here.

[weijian]

item12 is a Q&A on OCBC and GEH. Interesting that the parent is alluding to an future increase in dividend payout ratio?

MoM of OCBC AGM 2022

https://links.sgx.com/FileOpen/OCBC-Minu...eID=759938

[weijian]

A 39mil married deal (avg 16.99sgd per share) raising parent OCBC's rate from 87.908% to 88.404%. Depressed OPMIs slowly giving up?

https://links.sgx.com/FileOpen/_GEH_FORM...eID=762864

[weijian]

I don't really agree with Ben Paul's assertion that GE has great potential because parent OCBC has alluded that GE may be increasing its dividend payout ratio. But I believe GE has potential for when the inverted yield curve finally un-inverts.

The odds are really low that OCBC will privatize GE as it doesn't need to. No outsider will bid for GE. Even if OCBC is flush with cash, they may prefer to expand their existing franchises in other SEA countries. But you never know as the BOD at OCBC has a new chairman and the CEO has just been appointed to the BOD!

BT Mark to Market: Great Eastern’s great potential (Ep 33)

OCBC’s recent purchase of more Great Eastern shares has further narrowed the insurer’s public spread and increased the risk of it eventually being suspended from trading. But Great Eastern undervalued shares still hold great potential. Senior correspondent Ben Paul explains.

https://www.businesstimes.com.sg/podcast...tial-ep-33

[dreamybear]

Interested VB GE shareholders might consider contacting Mr Ong ....

https://www.linkedin.com/posts/chin-woo-...2096-nVr7/

---------------
Minority-investor action at Great Eastern, OCBC may spur expectations of value-unlocking initiatives
https://www.businesstimes.com.sg/opinion...nitiatives (paywall)

https://www.theedgesingapore.com/news/fi...s-next-agm
".....The three resolutions tabled by Ong are: To withhold 30% of Board of Directors’ fees until GEH’s share price recovers to 0.8 times of its Embedded Value; to replace OCBC shares in the current Executive Share Option Schemes for GEH's management with GEH shares; and to appoint an independent financial advisor to explore options to enhance GEH shareholders’ value.

Ong says he has collected 100 signatures to requisition for the three resolutions to be tabled at GEH's upcoming AGM....."

[money]

Interested VB GE shareholders might consider contacting Mr Ong ....

https://www.linkedin.com/posts/chin-woo-...2096-nVr7/

---------------
Minority-investor action at Great Eastern, OCBC may spur expectations of value-unlocking initiatives
https://www.businesstimes.com.sg/opinion...nitiatives (paywall)

https://www.theedgesingapore.com/news/fi...s-next-agm
".....The three resolutions tabled by Ong are: To withhold 30% of Board of Directors’ fees until GEH’s share price recovers to 0.8 times of its Embedded Value; to replace OCBC shares in the current Executive Share Option Schemes for GEH's management with GEH shares; and to appoint an independent financial advisor to explore options to enhance GEH shareholders’ value.

Ong says he has collected 100 signatures to requisition for the three resolutions to be tabled at GEH's upcoming AGM....."

thanks dreamy, i have contacted him. I always appreciate people who try to take the lead. It is always easy to just sell the shares and walk away but sometimes taking the easy way out isnt a good idea

[weijian]

Interested VB GE shareholders might consider contacting Mr Ong ....

https://www.linkedin.com/posts/chin-woo-...2096-nVr7/

---------------
Minority-investor action at Great Eastern, OCBC may spur expectations of value-unlocking initiatives
https://www.businesstimes.com.sg/opinion...nitiatives (paywall)

https://www.theedgesingapore.com/news/fi...s-next-agm
".....The three resolutions tabled by Ong are: To withhold 30% of Board of Directors’ fees until GEH’s share price recovers to 0.8 times of its Embedded Value; to replace OCBC shares in the current Executive Share Option Schemes for GEH's management with GEH shares; and to appoint an independent financial advisor to explore options to enhance GEH shareholders’ value.

Ong says he has collected 100 signatures to requisition for the three resolutions to be tabled at GEH's upcoming AGM....."

According to the Companies' Act, the company has to receive resolutions from "shareholders with not less than 5% of voting rights, or at least 100 shareholders". And Ong has meet that requirement, as per him.

While it is well within expectation (yes it is not hindsight bias) that the resolutions would be rejected, but will be interesting to see the reason/s and subsequent reactions along the way. The actions of the BOD will speak volumes about the "investability" of Great Eastern, IMHO.

RESPONSE TO REQUEST TO TABLE RESOLUTIONS  AT UPCOMING ANNUAL GENERAL MEETING

As regards the minority shareholder’s request to the Company for the three ordinary resolutions to be tabled at the upcoming annual general meeting, GEH has sought legal advice and understands that his request does not satisfy all of the requirements necessary for a requisition for resolutions to be moved at the next annual general meeting. GEH has responded to the minority shareholder accordingly.

https://links.sgx.com/FileOpen/20240306%...eID=791261

[mslee888]

Akan Datang, Its not over yet...more fireworks otw

https://www.theedgesingapore.com/views/f...ance-value

[weijian]

According to the Companies' Act, the company has to receive resolutions from "shareholders with not less than 5% of voting rights, or at least 100 shareholders". And Ong has meet that requirement, as per him.

While it is well within expectation (yes it is not hindsight bias) that the resolutions would be rejected, but will be interesting to see the reason/s and subsequent reactions along the way. The actions of the BOD will speak volumes about the "investability" of Great Eastern, IMHO.

RESPONSE TO REQUEST TO TABLE RESOLUTIONS  AT UPCOMING ANNUAL GENERAL MEETING

As regards the minority shareholder’s request to the Company for the three ordinary resolutions to be tabled at the upcoming annual general meeting, GEH has sought legal advice and understands that his request does not satisfy all of the requirements necessary for a requisition for resolutions to be moved at the next annual general meeting. GEH has responded to the minority shareholder accordingly.

https://links.sgx.com/FileOpen/20240306%...eID=791261

BT Ben Paul invited our OPMI hero Mr Ong for an interview and he revealed more details about OCBC's rejection. In essence, as per Mr Ong - (1) OCBC didn't answer his request when he asked them "is anything missing?" during the submission of his request. (2) When they rejected him, they told him to seek his own legal advice.

In the meanwhile, Ben Paul also flagged out the below statement in the official statement lodged with SGX which I missed out (as I thought it was the typical boilerplate response at the end of every release)

In the meantime, shareholders are advised to exercise caution when trading in GEH shares as there is no certainty that requests made to the Company through the media before the Company has been able to first review the requests and provide a formal response, will materialise.

With these, we can try to connect the dots - On hindsight, OPMIs made the wrong move to publicize their actions earlier than they should have done. But on the other hand, one cannot really blame them for "the rush" because after all, Mr Ong has revealed that they had been engaging them since 2020.

BT Mark to Market: Behind the minority-investor movement at Great Eastern (Ep 41)

https://www.businesstimes.com.sg/podcast...tern-ep-41