Short term
Trade view / 13 October 2014 at 7:23 GMT

Update: Allianz shaping up for rebound after Gross bombshell

Global Macro Strategist / Saxo Bank Group - Singapore Hub
Instrument: AXAS:xnas
Price target:
Market price:
We hit our initial profit target for 50% of the position at 6.80 (entry 6.60), with +3% gross / +75% ann. return on the long Allianz / short Axa spread.
The target for the balance is c. 6.90/7.00 which I'd expect us to get to before the end of the month. (Original Trade View posted on September 29)

Allianz, the global insurer that owns PIMCO and constitutes around 7.4% of the DAX, was hit by the news on Friday that Bill Gross will be leaving the latter sending Allianz' shares down more than 6%, which is huge for an insurer of this standing.
To put it another way, this was a more than four times standard deviation move and wiped out over $6 billion of equity value. With Allianz closing on Friday at EUR 128.20 and with the 100-day and 200-day moving averages at EUR 127 and EUR 123, it's worth doing the due diligence to see if this is an opportune time to pick up a long position in the insurer or take a view on the short side if one is expecting things to worsen.
We’ve added a few charts of Allianz versus the DAX to highlight the potentially huge disconnection. (see original post here)
Long Allianz / Short AXA
Entry: 6.58/6.60 (perhaps do 50% of the position today on VWAP, two clips of 25% over the next two days).
Stop: 6.30.
Target: Exit in two 50% clips 
1. Initial clip at 6.80 (+3.0%) [Completed Friday Oct 10, +3.0%grs / +75% ann. rtn] 
2. Balance at 6.90 / 7.00 (+4.5% / 6.0%).
Time horizon: Short-term.
Chart: Axa spread update on first profit-taking level

Source: Bloomberg, Saxo Bank
– Edited by Clare MacCarthy
For more on equities click here


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail