CONCERN OVER THE PRU’S ASIAN GROWTH

Analysts have expressed disappointment with the contribution of Asian operations to new business growth at the UK’s Prudential. The Pru yesterday reported group new business APE sales of £1.5bn for the first half, up 12% on the previous year. But analysts highlighted that the group’s Asian operation’s contribution to new business was weaker than expected. Group chief executive Mark Tucker insisted: “Our Asian story remains compelling. New business APE increased by 14% in the first half of the year building on the exceptional 48% growth achieved in the first half of 2007.” Tucker stressed the figures for the first half of last year had benefited from an aggressive marketing campaign in Taiwan and the launch of a new variable annuity product. He said: “Excluding Taiwan, new business in Asia grew by 29% and new business profit increased by 26%. We remain confident of doubling Asia’s 2005 new business profit by the end of 2008 - a year ahead of our previously stated target.” In a note published yesterday Keefe, Bruyette Woods (KBW) analysts Greig Paterson and Steven Haywood described The Pru’s Asian top line growth as “disappointing” but noted: “Management are still making bullish comments on Asian growth, and we believe that there will be upside surprises here going forward.”