Great Eastern

Great Eastern: shares have rallied close to a 5 yr high, having enjoyed record profits in 2012 of $1.2b ($768m ex-exceptionals), lifted by benign credit markets (non-par profits up >200% yoy) and hefty invmt gains of $562m. Citi forecasts 2013 profits to fall to $500m as such items normalize in 2013. At the operating level, the house sees near term challenges to premium growth from intense competition in Msia while new regulations in Spore may impact agency force sales. The house downgrades to Neutral from Buy, post the share price rally, but raises TP to $17.90 from $16.82. The stock’s $0.54/sh final + special div remains cum-dividend until 22 Apr (ie. ex-div on 23 Apr).