Credit Suisse First Boston lifts QBE forecasts

SYDNEY - Credit Suisse First Boston has raised its earnings estimates on QBE Insurance Group Ltd. and its share price target to A$20 ($22.30) from A$19.25 on higher US bond yields and future growth prospects.

CSFB, which kept its "outperform" rating", said the US Federal Reserve's decision to lift key interest rates for the 11th consecutive time to 3.75 per cent was positive for QBE given its assets profile was of a shorter duration than its liabilities.

CSFB said it had upgraded its earnings forecasts by 2 per cent for 2005 and by 6 per cent for both 2006 and 2007. QBE is Australia's biggest general insurer by premium income and is the second-biggest underwriter in the Lloyd's of London market.

"It is likely that the aftermath of Hurricane Katrina will present QBE with further acquisition opportunities, or seek growth in areas where incumbents may not be able to take full advantage due to capital constraints," CSFB analysts Arjan van Veen, Nick Selvaratnam and Alex Chau said in a report.

Shares in QBE last traded at A$17.56. The stock has outpaced the benchmark S&P/ASX 200 Index , which set a new record on Tuesday, by about 3 percentage points so far this year.

- REUTERS