Jefferies downgrades Australia's Helia Group to 'underperform', trims PT

Helia

03/11/2023 01:06

** Jefferies downgrades Australia's Helia Group Ltd  HLI.AX 
to "Underperform" from "Hold"; cuts PT to A$3.08 from A$3.37 per
share, as environment for new insurance written is challenged
with affordability issues
    ** The home loan insurer said on Thursday its quarterly
gross written premium was A$44.8 mln ($28.82 mln), down from
A$68.5 mln a year ago
    ** Adds lower GWP is a product of lower industry loan
volumes in response to higher interest rates and lower loan
approvals, especially in high loan to value mortgages (HLVR)
    ** Flags Australia's Federal Government Home Guarantee
Scheme's impact as an alternative to loss mitigation loans for
first-home buyers.
    ** Says claims costs are expected to grow, with a more
difficult environment for high LVR loan originations going
forward
    ** Stock up 49.6% YTD as of last close


($1 = 1.5545 Australian dollars)

 (Reporting by Aaditya Govind Rao in Bengaluru)
 ((Aaditya.govindrao@thomsonreuters.com;))