nwoodman
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Posts posted by nwoodman
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5 minutes ago, gfp said:
Here's some news:
https://news.fairfax.ca/emails/webview/238951/121216754890311147
Go Prem. A well deserved payday and an efficient way to retire a chunk of shares. Given the ramp in insider sales (not just Prem) I would argue that we were approaching IV except the TRS position suggests otherwise.
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6758.T Sony Co + 7974.T Nintendo
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7 minutes ago, Maxwave28 said:
Fair points, and yes I agree the insurance subs are where much of the investments are held. However those subs are controlled so that FFH fully controls distributions and investments.
Maybe i am over complicating it
All good, I think you touched on the key point and that is control. After all Odyssey isn’t wholly owned either
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49 minutes ago, dartmonkey said:
if once digit starts writing insurance at < 100% CR if it will start to invest its profits in equities
What about Odyssey or Brit or Allied? Should they also start to invest their profits in equities (both public and private) and slowly morph into conglomerates? Seems like a waste to replicate the Fairfax structure at the subsidiary level.
I think you will find the equities are held at the sub level. This is also the case with Berkshire.
It will be the same for Digit. Take Eurobank for example (from Perlexity):
Several subsidiaries of Fairfax Financial Holdings Limited own shares in Eurobank Ergasias S.A., a major Greek bank. According to the search results:
Zenith Insurance, Odyssey Reinsurance Company, TIG Insurance Company, United States Fire Insurance Company, First Capital Insurance Limited, TIG Insurance (Barbados) Limited, Advent Capital (Holdings) Ltd., Falcon Insurance Company (Hong Kong) Limited, Brit Insurance (Gibraltar) PCC Limited, Advent Capital (No. 3) Ltd., Newline Insurance Company Limited, Newline Corporate Name Limited, and Fairfax Financial Holdings Master Trust Fund have all acquired shares in Eurobank over the years.
For example, in December 2017, Zenith Insurance acquired 2,335,000 shares, Odyssey Reinsurance Company acquired 5,837,500 shares, TIG Insurance Company acquired 1,167,500 shares, and United States Fire Insurance Company acquired 2,335,000 shares in Eurobank.
A slightly more interesting question is where are the investment ideas going to originate? Ultimately HWIC would sign off I would think. -
Udio https://www.udio.com
This is a hoot. The kids and I have been taking this for a spin. The ability to come up with lyrics for inputs such “Midget goats who like ice cream” - rock, “Bitcoin is a Ponzi scheme”-punk, “Recipe for a soufflé”-hip hop.
The music is actually pretty good and the lyric and title generation had us in stitches. Highly recommend, especially if you liked Spinal Tap
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On 5/12/2024 at 2:43 AM, Viking said:
Eurobank is up $399 million and it is Fairfax’s largest equity holding at $2.84 billion.
Thanks @Viking. There seems an inevitability that Eurobank pushes beyond the $3bn mark. It feels like yesterday that the whole of FFH could be bought for $10 bn. Unreal.
A reminder Eurobank reports Thursday 16th May
https://www.eurobankholdings.gr/en/grafeio-tupou/etairiki-anakoinosi-29-04-24
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8 hours ago, SafetyinNumbers said:
Q124 showed only $34.8m of income from Poseidon and that’s much closer to 43% of Q423 reported income (just eyeballing the difference between 2023FS and Q323 reported income).
I assume the same is true for Eurobank which doesn’t report Q1 until next week and Helios which also hasn’t reported Q1 yet.
Thanks that seems to work. I might try some further back testing when I have a spare moment. Now that these entities are making decent money it's a bit more important to understand any timing differences
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3 hours ago, SafetyinNumbers said:
I guess we can assume FFH reports ATCO earnings on a one quarter delay? That should be a big help to Associates income in Q2.I actually thought it was on the current quarter. Hadn’t got as far as reconciling the numbers across to Fairfax to check.
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2 hours ago, gfp said:
Thanks for this
. Summary in the ATCO thread
https://thecobf.com/forum/topic/1691-atco-atlas-corp/?do=findComment&comment=563864
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21 hours ago, dartmonkey said:
Apparently, they have announced the price range, today:
The company announced a price range of Rs 258-272 on Friday, May 10, 2024. Read more at: https://thearcweb.com/article/go-digit-ipo-valuation-fairfax-prem-watsa-fyeU0WSqN1fQY2G6
I don't know WHERE they announced it, but it doesn't seem to be just a rumour.
No problems I would just love to know where
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@SafetyinNumbers. That's quite interesting. To be honest as as much as I would like the sugar hit to book I would much prefer them to have a stellar IPO record in India i.e stag and long term. Let Recipe, Farmers Edge and the like never be repeated. You get it right in India in terms of raising capital and delivering and you have a Lollapalooza.
Edit: Anchorage being next
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2 minutes ago, gfp said:
The article I linked to above was quoting Kamesh Goyal so I would say that is a credible source. This is all very similar to how a US IPO works. Leaks and rumors about pricing, subject to change leading into the final announcement, IPO prices set a bit low to hopefully get a nice enthusiastic pop on day one, etc. etc..
OK, so absolutely nothing offical to fill in the black dots. All I needed to know.
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5 minutes ago, nwoodman said:
The point is where is the media getting their spread in terms of their pricing from now?
“Go Digit IPO sets Rs 258-272 per share price band; bids open on May https://www.business-standard.com/markets/ipo/go-digit-ipo-sets-rs-258-272-per-share-price-band-bids-open-on-may-15-124051000481_1.html
No problems if that is the case but where are they getting that number from? The only thing that is official has that number blanked out
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Just now, gfp said:
Did you read my post either time I posted it? It will show up at that link when it is final. Every word in a sentence is important.
The point is where is the media getting their spread in terms of their pricing from now?
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9 minutes ago, gfp said:
RE: "I get that, where is the actual prospectus that these articles are referring to? I guess this is the first Indian IPO I have ever actually been interested in and it is bizarre. "
We must be on different planets or operating systems. Screen shot and post if you are actually seeing what they are reporting. Spoon feed me!
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7 minutes ago, gfp said:
That is what a 'red herring' preliminary prospectus is - a document with a bunch of blanked out sections because they haven't been solidified yet. Even a reported range for the IPO price is subject to change based on demand. 272 INR per share seems low. Even if they price the IPO at 272 it will probably open much higher. There are "selling shareholders," however small, with cost basis of 250 INR / share.
I get that, where is the actual prospectus that these articles are referring to? I guess this is the first Indian IPO I have ever actually been interested in and it is bizarre.
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12 minutes ago, Cigarbutt said:
^Yes the dividend capacity is a good starting point and it looks like FFH has already started to use this capacity in Q1 to buy back FFH shares.
Opinion: it's a good starting point but, under present conditions, the capacity to switch the asset allocation (bonds to equities) may be less than 3.0B because the Northbridge capacity is contingent upon regulatory approval and dividend capacity as reported above includes the 'dividends' (fixed by contract, at 9-10% of funding) to Allied, Brit and Odyssey minority 'co-investors' (carrying value at around 2,5B).
Cheers, there is also a similar positive feedback loop that facilitates share buybacks via the TRS. It’s a fascinating set up.My view is that IV is signalled when they close out the TRS and apologies for stating the obvious.
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I see the price band being reported at 258-272 rupees. I have searched through the red herring prospectus any reference to this price band is just a black circle. Not sure if there is something funky going on with my pdf reader. Can someone screen shot and upload a document that actually shows the floor and cap price as reported. Thanks in advance
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18 minutes ago, SafetyinNumbers said:
It seems like FFH has marked its stake in Digit at ~US$1.9b being the sum of the compulsory preferred fair value and the common carrying value. If the IPO is being done at Rs 272 or ~US$3.25 at prevailing exchange rates and the pre-IPO share count is ~875m, then the pre raise market cap is ~US$2.85b. I recall seeing somewhere FFH had a 68% stake which means we wouldn’t see much of a gain on listing as that works out to ~US$1.9b.
Does that make sense?
If anyone has a better idea please share! I’m trying to understand how this all plays out for book value in Q2.
It does but the good news is we are about to find out
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If this goes full fintech then I would expect at least a $3.5bn market cap (4x’sGWP). Their 68% gets marked at $2.4bn. Your guess is as good as mine though.
The only thing I can say with reasonable confidence is that Digit is likely to be worth a lot more than the current carrying value in 10 years time
Key Dates:
1. Bid/Offer Opening Date: Wednesday, May 15, 2024
2. Bid/Offer Closing Date: Friday, May 17, 2024
3. Finalisation of Basis of Allotment: On or about Tuesday, May 21, 2024
4. Initiation of Refunds/Unblocking of Funds: On or about Wednesday, May 22, 2024
5. Credit of Equity Shares to Depository Accounts: On or about Wednesday, May 22, 2024
6. Commencement of Trading on the Stock Exchanges: On or about Thursday, May 23, 2024 . -
@Haryana Good stuff!
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Double points for a link either on the Digit Website, SEBI or the BSE/NSE to the IPO. I had a quick look but no joy from my quick search
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1 hour ago, glider3834 said:
Fairfax buybacks ~ 130K shares during March & ~151K shares during April
Yep, hard to believe they squared away ~0.65% outstanding in April. They REALLY liked it <$CAD1500
https://ceo.ca/api/sedi/?symbol=FFH&amount=&transaction=&insider=
Shares outstanding as of March 31, 2024
Buyback percentage = 151,625 ÷ 22,974,000 = 0.66%
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31 minutes ago, Hoodlum said:
IPO is expected on the 15th next week, with IPO range announcement coming in 2 days.
Go Digit General Insurance is looking to launch its initial public offering (IPO) next week, likely on Wednesday, May 15, 2024, said a report from ET Now. The company price band of the issue will be declared on Friday, May 10 and the anchor book may open on Tuesday, May 14.
Cheers, big news if true. Here is the source
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@Cigarbutt thanks for the heads up. On a sub level the RBC ratio is a lot lower than what I was calculating for the whole shooting match. It might be possible to calibrate using Note 19: Statutory Requirement, that Jen referred to as dividend capacity and assume that is based off an RBC ratio of 300%. Or perhaps it is as simple as seeing the total in Note 19 as the starting point in terms of the capital that could be reallocated as it is truly surplus if it can be dividended and the max is then some conservative multiple.
Will have a read and a think. The relevant section of Note 22: Financial Risk Management, you were referring to is reproduced from the AR below:
In the United States, the National Association of Insurance Commissioners ("NAIC") applies a model law and risk-based capital ("RBC") formula designed to help regulators identify property and casualty insurers that may be inadequately capitalized. Under the NAIC's requirements, an insurer must maintain total capital and surplus above a calculated threshold or face varying levels of regulatory action. The threshold is based on a formula that attempts to quantify the risk of a company's insurance and reinsurance, investment and other business activities. At December 31, 2023 Odyssey Group, Crum & Forster, Zenith National, Allied World and U.S. Run-off subsidiaries had capital and surplus that met or exceeded the regulatory minimum requirement of two times the authorized control level; each subsidiary had capital and surplus of at least 3.2 times (December 31, 2022 - 3.0 times) the authorized control level, except for TIG Insurance which had at least 2.0 times (December 31, 2022 - 2.0 times).
In Bermuda, insurance and reinsurance companies are regulated by the Bermuda Monetary Authority and are subject to the statutory requirements of the Bermuda Insurance Act 1978. There is a requirement to hold available statutory economic capital and surplus equal to or in excess of an enhanced capital and target capital level as determined under the Bermuda Solvency Capital Requirement model. The target capital level is measured as 120% of the enhanced capital requirements. At December 31, 2023 and 2022 Allied World's subsidiary was in compliance with Bermuda's regulatory requirements.
In Canada, property and casualty companies are regulated by the Office of the Superintendent of Financial Institutions on the basis of a minimum supervisory target of 150% of a minimum capital test ("MCT") formula. At December 31, 2023 Northbridge's subsidiaries had a weighted average MCT ratio of 255% (December 31, 2022 - 241% of the minimum supervisory target.
Brit is subject to the solvency and regulatory capital requirements of the Prudential Regulatory Authority in the
U.K. for its Lloyd's business and the Bermuda Monetary Authority for its Bermudan business. The management capital requirements for Brit are set using an internal model based on the prevailing regulatory framework in these jurisdictions. At December 31, 2023 Brit's total capital consisted of net tangible assets (total assets less any intangible assets and all liabilities), subordinated debt and contingent funding from its revolving credit facility and amounted to $2,545.7 (December 31, 2022 - $2,052.7). This represented a surplus of $1,050.4 (December 31, 2022 - $709.5) over Brit's management capital requirements.
Gulf Insurance is governed by the local capital adequacy regulations issued by the Insurance Regulatory Unit
("IRU") in the State of Kuwait. At December 31, 2023 Gulf Insurance had Regulatory Solvency Capital of 998% of the minimum capital required.
In countries other than the U.S., Bermuda, Canada, the U.K. and Kuwait where the company operates, the company met or exceeded the applicable regulatory capital requirements at December 31, 2023 and 2022.
Fairfax 2024
in Fairfax Financial
Posted
That’s quite the hike
“In a bid to make rich individuals and corporations pay more taxes, the federal Liberals said they will increase the capital gains inclusion rate(opens in a new tab) — the share of capital gains that is taxed — from 50 per cent to 67 per cent. The change will apply to those with more than $250,000 in capital gains in a year as of June 25. All corporations and trusts will also have to pay taxes on a bigger portion of their gains.”
https://www.ctvnews.ca/canada/what-is-changing-about-canada-s-capital-gains-tax-and-how-does-it-impact-me-1.6860457#:~:text=Canadians must report taxable capital,capital gains in a year.