China was flying high at the start of the year, having performed strongly during the initial impact of the pandemic and then again during the reflationary rally. Looking back over five years investors had made 189% in the MSCI China Index on a total return basis compared to just 112% in the MSCI ACWI. China’s performance was the key factor behind the strong performance of the broader emerging Asia markets.
Companies: BEMO AIE BRLA ANII JCGI
Barings Emerging EMEA Opportunities (BEMO) offers the potential for capital growth and income from a diverse region which has little representation in mainstream indices and funds. BEMO was known as Baring Emerging Europe until November 2020 and is run by the same team with the same strategy, but in a wider region with more varied drivers of growth, including both domestic and global themes. Current key themes driving the portfolio include growing demand for the materials used for electric vehi
Companies: Barings Emerging EMEA Opportunities PLC GBP
Markets have been fairly quiet over the summer, with the MSCI ACWI grinding 2% higher since the start of July. This followed a tumultuous first half of the year, with violent rotations between growth and value, large and small cap, and conflicting information and concerns over new variants which could prolong the pandemic. We think many issues stand at something of a junction. As investors return to their desks and (we suspect) critical developments become apparent, new trends could start to bec
Companies: BEMO BHMG BRFI BRLA RICA
In Russian roulette, as in life, we’re often enjoined that: “If at first you don’t succeed, try, try and try again”. Central banks have clearly taken this dictum to heart, and remain highly committed to trying to inject inflation into the global economic system, despite repeated failures in Japan and the West. The immediate impact of the coronavirus pandemic has been deflationary. As a massive economic contraction took place, and an associated output gap opened, demand shortfalls (although butt
Companies: JRS BRFI BEMO BRLA BRWM
In recent years smaller investment trusts have been under pressure. The demand for smaller vehicles has been reduced by two factors: the consolidation in the wealth management industry and the increasing prevalence of centralized buy lists used by DFMs and advisers. If a large amount of money is being managed to a model, then allocations can be impossible to deal into a small trust. Anecdotally, the lower limit of viable size for professionals has been rising. £200m is a more realistic cut off p
Companies: BRLA AIE BEMO HOT AJOT MIGO CCJI
Baring Emerging Europe (BEE) aims to generate strong total returns – latterly with a substantial contribution from dividends – by investing in emerging European equities. In practice this means Russia, Poland and Turkey, which together make up almost 90% of the MSCI Emerging Markets Europe 10/40 benchmark. Manager Matthias Siller has a strong track record of alpha generation, with the trust being in the top quartile of emerging market trusts for alpha and Sharpe ratio, as we discuss in the Perfo
The coronavirus pandemic has caused dividends to be cancelled or cut across the world, but the impact has yet to be fully felt – with more bad news likely to come in the second half of the year. Pressure has come through reduced revenues, due to a slowdown in economic activity and a regulatory interference in dividends being paid by industries which have received taxpayer support. The task for income investors is to identify the regions and sectors which are expected to be less affected; to whic
Companies: BRSA NAIT JETG BGEU SOI HFEL BRFI BEMO
Since we last reviewed our portfolio of discount opportunities, an awful lot has happened. The period from October to December saw a new Brexit deal, followed by the UK government winning a parliamentary majority to implement it. Both were bullish for UK and European markets, and led to a sharp rally in markets and a rapid narrowing of investment trust discounts. Globally, the mood was pretty optimistic for 2020; with a growing number of managers and commentators forecasting a rally in cyclical
Companies: SST BEMO SJG TFG OCI
It is something of a truism to say that emerging markets are not a homogenous blob, but a range of highly differentiated economies and stock markets. Yet as investors, we often categorise them as one and the same, especially from an asset allocation and risk management perspective.
Companies: FCSS BRFI ANII BEMO BRLA
Baring Emerging Europe (BEE) aims to generate long-term total returns from a disciplined bottom-up approach, selecting the most attractive companies in the currently attractively valued emerging Europe region. The benchmark, the MSCI EM Europe 10/40 Index, is dominated by Russia (59%), and BEE has outperformed thanks to strong returns in that country as it recovers from the recession in 2014 and 2015 (discussed further in the Performance section). Returns have been strong on a risk adjusted basi
“Is life always this hard, or just when you’re a kid?” “Always like this” (Leon: The Professional) In the post-financial crisis world, value investors have found themselves facing a period of structural underperformance relative to growth investors which has been unusual relative to history. In fact, this is the longest period of underperformance since at least the 1920s. This raises the question; what, if anything, could cause this to change?
Companies: GVP ASL BEMO MIGO TMPL
In January we introduced a new quantitative rating system for investment trusts. Our ratings look at NAV total return performance. They are, we believe, the first quantitative rating for closed-ended funds to do so and thereby capture the performance of the management team rather than the noisier share price movements. Our ratings aim to identify the top performers for capital growth and for income. We have designed the quants to identify those trusts which have added the greatest alpha to their
Companies: FGT SLS IPU BEMO JCH
Baring Emerging Europe (BEE) aims to provide capital growth and a high dividend yield from a portfolio of stocks in developing Europe, mainly Russia, Poland and Turkey. The manager, Matthias Siller, focuses strongly on bottom-up stock selection to generate returns, and has produced impressive amounts of alpha over the past five years, higher than all but one of the global emerging markets trusts. While total return performance has been strong, the income dimension is a more recent feature. Sinc
In our February article 'Sweet Treats', we launched our list of discount opportunities - trusts we felt had the potential to see their discounts close significantly and, in turn, supercharge investors' returns. Our list has had a good beginning to its life, with the majority seeing their discounts close slightly in the almost three months since, aided by a good period for the markets. The investment trust universe has seen its average price rise by 3.2% since 13 February, as the below graph show
Companies: ASCI HOT RMMC OCI MHN TFG BEMO
One of the attractions of investment trusts is the potential to pick up discounted bargains, which can supercharge NAV returns if correctly anticipated. As we have remarked before, closed-ended funds have historically delivered superior NAV returns. But buying shares on a substantial discount can significantly enhance those NAV returns should the discount narrow on a sustained basis. The reasons for investment companies long run NAV outperformance of equivalent open-ended funds, lies with their
Companies: BEMO AAS RMMC MHN OCI TFG
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Palace Capital has released a good trading update of for the 6 months to 30 September. The Group has achieved good progress both across the portfolio and in sales achieved at Hudson Quarter. With cash reserves rising, the Group continues to look for value creative opportunities to recycle capital which should realise value for shareholders. Buy
Companies: Palace Capital plc
We see the UK Government’s Net Zero Strategy as being overall helpful but not especially definitive. Amongst our coverage group, Drax Group (DRX LN) and Velocys (VLS LN) benefit from the Humberside CCS cluster prioritisation and Velocys from SAF support. The amount of renewables is likely to boost the need for flexibility solutions where Drax, Gore Street (GSF LN) and SIMEC Atlantis (SAE LN) can benefit. Hydrogen companies ITM (ITM LN) and Powerhouse Energy (PHE LN) are likely to find support. T
Companies: ADN DRX GSF ITM NESF PHE SAE SIT STRLNG TLG VLS
Companies: Plus500 Ltd.
The third quarter continued to enjoy record CIB revenues and loan provision recoveries. Consensus expectations have now largely aligned with our projections, thus leaving limited upside potential in our view.
Companies: Barclays PLC
What’s new: Tatton’s interims trading update confirm it has “delivered strong growth in all its key metrics during the period including revenue, profits and assets under management” (AUM). It is “trading in line with expectations”.
Companies: Tatton Asset Management Plc
Non-Standard Finance (‘NSF’), one of the leading providers of unsecured credit to UK adults, published interim results for the half year to 30 June 2021 on 28 September. Overall, these showed a significantly lower loss before tax due to improved operational performance and lower below the line charges. The group also reported that current trading was ahead of plan primarily due to strong collections performance. Discussions with the FCA regarding the redress programme for guarantor loans custome
Companies: Non-Standard Finance Plc
Updating at the end of H1, Urban Logistics REIT (“ULR”) continued to deploy capital, with 2 further transactions in the last weeks of H1 bringing the total to £103m since the last raise (£109m in Jul-21). There is a further £50m in advanced stages and a £400m pipeline beyond that. Yields are in line with expectations and assets are pregnant with active management opportunities, which ULR thrives on. The board is seeking to move to Premium List to facilitate future growth. We leave forecasts unch
Companies: Urban Logistics REIT plc
AuM pushed on in Q2, hitting £10.8bn – including the acquisition of the Verbatim funds (+13% in H1 organic only). Crucially, net inflows have remained strong through the whole of H1 at £109m avg pcm. This flow momentum underpins an encouraging outlook, both near and medium-term. We leave our forecasts unchanged although note risk to the upside heading into H2. We will review our model again at the Interims. Given the pace of growth and scale of opportunity from already established relationships,
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
Companies: SYS1 ARE SO4 SNG TMG TMT OHG IDE KIBO MRL
Gore Street’s trading update confirms expectations of a strong trading environment for batteries in both the GB and Irish markets. Driven principally by high gas prices creating electricity market volatility and with tight capacity margins likely to remain, we see the company continuing to generate excess cash returns in this financial year at least.
Companies: Gore Street Energy Storage Fund PLC
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
Devolver Digital to join AIM, an award-winning digital video games pu
Companies: SAE HMI MNO MSMN NSCI OMG PCA
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
Companies: ZYT CIC DMTR GILD LMS MMAG PYC SMRT SBI
Currently, Gore Street Energy Storage Fund (GSF) primarily relies on revenue from frequency response services, including Dynamic Containment (DC), to estimate near-term returns. The dislocation in the UK power market has led to a sharp rise in returns available from energy arbitrage leaving GSF’s assets well placed to benefit from this increased volatility. In September, those of GSF’s GB storage assets that participated in the actively-traded GB power markets generated revenues that were signif
Companies: Chrysalis Investments Limited
Today's news & views, plus announcements from BHP, MGGT, RIO, BWY, MONY, BGO, YOU, AVAP, PCA & SOLG.
Companies: AVAP BGO RIO SOLG