We covered CGF in detail in late April targeting the $8 area, exactly where we are now. In June we saw Dai-Chi Life buy an additional 4.8% stake in CGF, taking its voting power to 19.9% raising speculation of a bid by Dai-ichi who have a history of initiating with minority stakes before pursuing full acquisitions. Proposed regulatory changes to Australian longevity products capital settings look very positive for CGF with it likely to improve their capital position. With the retirement income solutions company executing, we believe CGF still represents good value with no premium built into its valuation at $8.
- We can see CGF consolidating around the $8 before taking a leg up towards the $9-10 area
MM is cautiously bullish towards CGF
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