Manulife Doing What It Can

Manulife Financial Corporation (MFC) is a broad-based financial services firm headquartered in Toronto, Canada. It converted from a mutual life insurance company to an investor-owned, publicly traded company in July 1999. With more than 20,000 employees and thousands of distribution partners, the company is a leading provider of financial protection and wealth management products serving millions of customers in 19 countries and territories around the world.

While the company experienced significant equity market related charges, including those for segregated fund and variable annuity guarantees, and lower asset-driven fee income, it experienced substantial credit losses due to investment writedowns. Though the borrowing of C$3 billion was a prudent decision for strengthening its capital position without going for equity issues, we remain concerned about the continued declines in the equity market and its consequent pressure on the company’s capital ratios going forward.

Nevertheless, the company’s well-diversified and enhanced distribution capabilities, along with its strong market positioning globally, give it a distinct competitive advantage over its peers. Hence, we reiterate our Hold recommendation.

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