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Medibank Private (ASX:MPL) has flagged that some $240M of its investment portfolio is the company’s asset most likely to be exposed to tariff risk ahead of its appearance at this week’s much-watched Macquarie Conference.
However, the company has otherwise told the market that it expects to be relatively insulated from international volatility given that Medibank’s operations and assets are largely domestic.
If the market didn’t believe the news, that wasn’t obvious – the stock was up 0.5% at lunchtime, suggesting at least some investors may have been swayed by the stock’s capacity to become a defensive play.
Helping that perception is that Medibank also reminded investors it will benefit from RBA rate cuts, with the next meeting carrying a nearly 100% chance of a cut. Domestic core inflation now sits below 3%.
“Medibank’s investment portfolio is also exposed to the RBA cash rate, where a 25bps movement has an approximate $7 million annual impact to investment income,” MPL wrote.
Any further reductions in the RBA cash rate are expected to provide some cost-of-living relief to Australians supporting healthcare affordability, customer growth and health industry resilience.
Medibank has been on a tear since the Federal government approved premium increases back in late February – something the company itself was keen to advertise.
To date, 1Y returns are up +34.5%.
MPL last traded at $4.70.
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