AIG...how cheap it is?

By Sabri Jalil

Still remember AIG? One of the biggest insurance company in this planet.

The price has dropped drastically in tandem with stock market crash late last year. The highest price of AIG for period of 52 weeks (from 27 Feb 2008 – 24 Feb 2009) was $52.25 and it has dropped to the lowest $0.38. As of New York Stock Exchange closed yesterday (25 Feb 2009) it closed at $0.46. Can you calculate how many percent it dropped?

Still you remember? AIG has got the support from US government in form of capital injection amounting $85b. It is a part of emergency loan programme to avoid the giant companies in US to be dissolved. The bailout has made US government to have 79.9% stake in AIG. In other word, AIG now is a government supported public listed company.

Will US government let the AIG’s business down after injecting billions dollars?

I believe that, the answer is “NO”

I also believe that, since the highest price was $52.25 and AIG has turned into the government backed company, the price will rebound far when the economy in US and rest of the world recovered.

If you managed to buy at $0.46 today, don’t target the selling price at previous highest price.. it is looks greedy, just target the price at $10.00….still too high?...so what about $5.00..then imagine how much will you gain? By the way if investors intend to set at higher price, it is up to them. It also a good decision because AIG is a long term investment.

Getting more opinion on AIG? Please call me at 6013-7233600 or 607-3333600.

Sabri Jalil

Kenanga Investment Bank

Level 2, Menara Pelangi

Taman Pelangi, Johor Bahru

Johor, Malaysia