Investors Warned Not To Invest In AIG
A recommendation by Goldman Sachs to avoid investing in AIG (American International Group) came on the heels of an 8% share drop yesterday according to Reuters UK.
Analyst Thomas Cholnoky said, “the intricacies of AIG’s business are so complex that management may not even know the extent of the company’s ultimate exposures, let alone losses”. He goes on to warn investors of AIG’s uncertain future even if lowered share prices seem appealing.
Cholnoky is predicting between $9 billion and $20 billion in losses as a result of “credit default swaps”. This could result in a major shift in the risk quality of AIG’s assets.
The analyst stated AIG’s stocks were ‘neutral’ and with the issue of losses, the group’s investment portfolio could be just as worrying as their losses of financial products.
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