The actual situation in the economy, it is really confused, there is no right forecast or assumption in order to determine whether the market is recovering or is still in the crisis.
Every week reading the financial news, it is easy to have different impressions and point of view depending of which article is taken into consideration. After several weeks of writing different post, I realized that usually on averages the news, coming from a macroeconomics aspects, are often negative regarding the economy; on the other side generally in this period news regarding the quarter results are showing the positive effect of the recovery on companies.There is a contradiction that is showing the different way of interpreting the actual situation; this week and decided to critically analyze the news of Allianz ‘s quarter results.
The Wall Street Journal uses its classical approach to the news; objectivity and awareness about the facts and figures.
The article is well structured and gives a clear idea of what are the reasons of this incredible result. In doing so it uses key elements of the financial statement such as operating profit or total revenue in order to give to everyone, not just to specialized readers, the chance to understand the financials data of the article: “Net profit for the three months to Sept. 30 was €1.32 billion ($1.96 billion), compared with a loss of €2.02 billion a year earlier. The year-earlier figure included a €2.6 billion hit from its Dresdner Bank arm, which the company sold to Commerzbank AG for around €5.1 billion in the first quarter” or “Operating profit in the third quarter rose 23% to €1.93 billion from €1.56 billion, boosted by strong contributions from its life-health insurance and financial services businesses”.
The second part is dedicated to the forecast and historical company with 2008 with citation of the Chief Financial Officer words regarding future prospects of the company: “Allianz is well capitalized and prepared for delivering solid earnings even in the challenging market environment ahead, due to its high-quality investment portfolio and conservative risk management approach.”
The second of article taken into consideration is from Bloomberg. The news is divided in three parts focusing of major aspects: the introduction, not yet satisfactory and solvency ratio.
All three are mainly based on interviews of executives or specialized analyst of the market.
The introduction gives a wider idea of the news showing and explaining key figures and facts citing Allianz declaration: “Reliable statements about future profit levels aren’t possible, Allianz said citing risks to the economic recovery and capital market volatility”. It is possible to notice from this part the objectivity and complexity of this article; Bloomberg give insight of the market to specialized readers that want technical analysis and explanations.
The last two parts analyse the most important aspects to be taken in consideration: “We achieved a reasonable result in the property and casualty business, given the still challenging market environment, but the operating result isn’t yet satisfactory,” said Chief Financial Officer Oliver Baete and “Allianz is “well capitalized” with a so-called solvency ratio, a measure of its ability to absorb losses, of 164 percent, including the dividend accrual”.
The last article is from the Il Sole24ore, the Italian specialized financial newspaper. Il Sole24ore could be compared to Reuters in somehow in this type of news. Both news are reliable and well written giving a wider idea to reader about the topic; they never enter in details or explanation. Therefore it could be considered a quick flash of the news, well structure with all key elements.
Allianz is the example of good strategy to overcome the crisis; it has sold Commerzbank that was losing money in order to avoid bankruptcy and to focus on the core business insurance. Companies should focus on core business and sell not pertinent business, in my opinion it is fundamental to focus “on what it could be done better and more efficiently”.
Wall Street Journal:
http://online.wsj.com/article/SB125775073100937989.html?mod=googlenews_wsj#articleTabs%3Darticle
Bloomberg:
http://www.bloomberg.com/apps/news?pid=20601100&sid=a5JZ_.5_pFgk
Il Sole24ore
Reuters:
http://uk.reuters.com/article/idUKL940580420091109
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