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Everything You Need to Know on Thursday: Manulife Reaches $5.4-Billion Reinsurance Agreement With Reinsurance Group of America

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Moomoo News Canada wrote a column · 4 hours ago
Everything You Need to Know on Thursday: Manulife Reaches $5.4-Billion Reinsurance Agreement With Reinsurance Group of America
Good morning mooers! Here are things you need to know about today's market:
● S&P/TSX 60 Index Standard Futures are trading at 1,505.40, up 0.32% from previous close
● Oil prices climb amid increased geopolitical risks and robust supply
● Manulife reaches $5.4-billion reinsurance agreement with Reinsurance Group of America
AtkinsRealis wins US$60 million U.S. Federal grant to assist in railroad upgrades
Currency Snapshot
Today, the Canadian dollar is trading at 71.49 US cents, a decrease from the previous close.
Commodities
Oil Prices Climb Amid Increased Geopolitical Risks and Robust Supply
Oil prices rose early Thursday, driven by increased geopolitical tensions as Russia reportedly used an intercontinental missile in its attack on Ukraine, despite the global oil supply remaining robust.
In the markets, West Texas Intermediate (WTI) crude for January delivery climbed $1.34 to $70.09 per barrel, while January Brent crude increased by $1.28 to $74.09 per barrel.
The situation between Russia and Ukraine escalated with Ukraine's first attack on Russian soil using missiles approved by the Biden Administration. In response, Russia launched an intercontinental ballistic missile at Dnipro, Ukraine, a type typically intended for nuclear warheads, although no nuclear payload was confirmed, as per The Guardian.
Looking ahead, oil supply is expected to surpass demand by 2025 due to increasing U.S. inventories, weak demand from China, and higher production in the Western Hemisphere. According to Reuters, OPEC+ might further delay easing its 2.2 million barrels per day voluntary supply cuts in its December meeting, adjusting plans based on market conditions.
PVM Oil Associates noted that while the global supply situation could keep price rallies in check, unexpected geopolitical shifts could still temporarily drive up oil prices. However, these spikes are likely to be brief unless they significantly disrupt the overall supply-demand balance.
Stocks to watch
Manulife Reaches $5.4-Billion Reinsurance Agreement With Reinsurance Group of America
On Wednesday, $Manulife Financial Corp (MFC.CA)$ announced it had finalized a $5.4 billion reinsurance deal with Reinsurance Group of America. The agreement involves two segments: $2.4 billion allocated for long-term care (LTC) reserves, which will reduce Manulife's LTC reserves by 18%, and a legacy block concerning U.S. structured settlements holding $3.0 billion in reserves.
Manulife stated that this agreement would enhance its core return on equity and free up $800 million in capital, which it intends to redistribute to shareholders via share buybacks. However, the deal is expected to decrease annual core earnings by $70 million and net income by $50 million.
Chief Executive Roy Gori highlighted the strategic importance of the transaction, stating, "This marks a significant step in unlocking shareholder value, representing our second major LTC reinsurance transaction within a year and speeding up our strategic shift towards a portfolio that is more profitable and less risky. It also underscores our capability to manage complex deals and work with skilled counterparties to achieve beneficial results, covering both mature and newer LTC blocks."
Following the announcement, Manulife's stock fell by $0.48, closing at $45.03 on the Toronto Stock Exchange.
AtkinsRealis Wins US$60 Million U.S. Federal Grant to Assist in Railroad Upgrades
On Thursday, $Atkinsrealis Group Inc (ATRL.CA)$ announced securing a five-year Blanket Purchase Agreement valued at US$60 million. Under this agreement, ATRL will provide support, technical assistance, compliance reviews, and project monitoring services to the Federal Railroad Administration (FRA) of the U.S. Department of Transportation.
The FRA is responsible for administering funding to states and qualified entities to enhance freight rail and intercity passenger rail infrastructure, facilities, and equipment.
Source: MT Newswires
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