Fear and loathing hit Legal & General in a big way this week. In truth, the insurer has been under the cosh for some time, as the graph suggests, but its shares were trounced as nasty rumours concerning its financial foundations swirled around the markets. Would the company have to call on shareholders for a walloping dollop of extra cash? Might the dividend have to be slashed? So great were the worries that shares in the company slumped 25 per cent at one point on Monday.
Nerves were calmed as soon as L&G told investors about its capital position. That said, the news was far from good: L&G said it is girding itself for a return to economic conditions last seen in the 1930s.
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