Why Great Eastern Holdings' $18.6m profit was highly expected

It dropped both YoY and QoQ.

According to DBS, Great Eastern Holdings’ (GEH) 2Q13 net profit came in at only S$18.6m, tumbling y-o-y and q-o-q because of mark-to-market losses at its non-par fund. 

DBS said that this was expected as bond yields were volatile in late 2Q13. Gross premiums grew 23% q-o-q and 30% y-o-y on the back of strong underwriting for life assurance funds.

"Total weighted new sales improved 29% q-o-q and 64% y-o-y, while new business embedded value rose 32% q-o-q and 20% y-o-y. GEH’s earnings to remain volatile. If bond yields continue to trend up, there may be risk of more mark-tomarket losses. But GEH’s underlying business will remain strong given its market position in Singapore and Malaysia," DBS said.