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QuotedData’s morning briefing 25 June 2021

QuotedData's morning briefing

In QuotedData’s morning briefing 25 June 2021:

  • Jupiter Emerging and Frontier Income (JEFI) has announced its interim results for the six months ended 31 March 2021. During the period, JEFI has provided a share price total return of 26.9% and an NAV of total return of 23.9%, both of which have strongly outperformed the 7.7% return provided by the trust’s benchmark, the MSCI Emerging Markets (Total Return) Index in sterling. JEFI paid its first quarterly interim dividend of 1p per share on 26 March 2021 and its second quarterly interim dividend (also 1p per share) is to be paid today (25 June 2021). The portfolio’s underweight in China and overweight in Mexico became positive drivers of absolute and relative performance during the period, while relative performance was bolstered by JEFI having a zero weighting to Alibaba, one of the largest benchmark constituents, as heightened antitrust scrutiny weighed on sentiment towards that stock. JEFI’s small cap allocation was a key performance driver as companies that were disproportionately impacted by H1 2020 sell-off continued to recover during the period. However, Frontier markets lagged the headline MSCI Emerging Markets Index, impacting relative performance due to the portfolio’s 15% weighting to these. Three new positions were added during the period: two in Egypt – banking group Credit Agricole Egypt (CAE) and dairy products manufacturer Obour along with Taiwanese chip designer, Elan.
  • Baillie Gifford European Growth has announced that it has agreed to issue €30 million of long-term, fixed rate, senior, unsecured privately placed notes, which it says provides it with long-term financing at a very attractive rate. The new privately placed notes are being issued in one tranche: €30 million with a fixed coupon of 1.55% to be repaid 24 June 2036. The coupon will be payable semi-annually. The funding date is 24 June 2021. The aggregated €75 million of available borrowings provides scope for invested borrowing to go to 12% of shareholders’ funds as at 23 June 2021.
  • On 14 June 2021, Menhaden announced its intention to change its name to Menhaden Resource Efficiency, with the aim that this would better reflect the trust’s investment objective. This name change has now taken effect.
  • JZ Capital Partners has announced that it has completed its issue of loan notes to the managers (click here to read our original story on the announcement of this transaction). As we said at the time of the original announcement on 28 May, by issuing loan notes rather than shares and by structuring these so that they mature ahead of the zero dividend preference shares, Messrs Jordan and Zalaznick have put themselves in a stronger position than ordinary shareholders and zero dividend preference shareholders. This is disappointing and is perhaps an indication as to why the trust’s discount is as ridiculously high, 58.6% according to data from Morningstar, which is the widest in the flexible investment sector – exceeding that of its nearest peer by around 20%.

We also have Saba Capital blocking of Crystal Amber’s continuation, and annual results (for nine months) from Worsley Investors (its core equity strategy is performing strongly).

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