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QuotedData’s morning briefing 28 February 2022

In QuotedData’s morning briefing 28 February 2022:

  • European Opportunities (JEO) has posted its interim results for the six months to 30 November 2021, during which time its NAV (with dividends reinvested) increased by 12.8% while its share price (with dividends reinvested) increased by 9.9%. This compares with a return of 3.8% from the MSCI Europe Total Return index, the company’s benchmark. Manager, Alexander Darwall (pictured), said: ‘ The performance in the period under review marked a reversal of performance from the previous reporting period. It is possible to see that our style has prevailed as cost inflation has started to bite and as the threat of rising interest rates poses a risk to heavily indebted companies. Since the outbreak of Covid two years ago, markets have been carried by two forces: cheap money and money printing (QE); and optimism around political slogans such as ‘Build Back Better’. These two factors, in our opinion, will continue to dominate the investment backdrop. However, they are likely to dampen prospects as on both counts there will be a reckoning, the catalyst for which is inflation.’
  • Infrastructure India (IIP) has signed an agreement for the conditional sale of assets belonging to its subsidiary, Indian Energy Limited (IEL). IEL owns and operates wind farms at two sites in the Karnataka and Tamil Nadu, with 41.3MW of installed capacity. IEL holds each wind farm asset within separate Special Purpose Vehicles, Theni and Gadag, which are its only assets. The agreement is for the conditional sale of its 100% interest in each SPV to AVSR Constructions, which develops, operates and maintains renewable energy projects in India. The total consideration to be received by IEL from AVSR for both assets is INR 550m (approximately £5.45m) and the transaction is structured with the separate sale of each SPV. The net proceeds of the sales will be used for group working capital, conditional upon IIP’s lenders waiving the requirement to pay down a proportion of the company’s debt, and will provide the company with a forecasted positive cash runway until September 2022.
  • Ruffer (RICA) has posted its half-year report for the six months to 31 December 2021. During the period under review, its share price total return was 2.6% while its NAV total return was 2.8%, with standout contributions coming from Marks & Spencer (+54%) and Tesco (+29%). The managers said the period was characterised by a rotation within rising markets back towards ‘old regime’ trades of growth and quality outperforming value while bond yields behaved in a more benign fashion. They added: ‘2021 might be remembered as the year investors tumbled down a rabbit hole and entered financial wonderland. The stock market went mainstream in a fashion not seen since the late 1990s. Investors have poured more than US$1 trillion into equity funds in the past 12 months – more than the combined inflows of the past 19 years.’
  • EP Global Opportunities (EPG) has announced the results of the tender offer to return up to 20% of the issued share capital of the company to shareholders as set out in the circular published by the company on 26 January 2022. A total of 11,577,529 shares, being approximately 31.7% of the company’s issued share capital on 24 February 2022, were validly tendered – representing an oversubscripion. Tenders will therefore be accepted in full from shareholders who validly tendered their basic entitlement or less. Following a scale-back exercise, tenders in excess of this will be satisfied to the extent of the basic entitlement plus approximately 43% of the excess shares tendered. After application of the scale-back mechanism, a total of 7,305,545 shares will, therefore, be purchased under the tender offer and subsequently placed in treasury, before being purchased by Panmure Gordon for a total cost of approximately £22.9m.
  • JPMorgan Russian Securities says that, following the announcements from the US/EU/UK authorities on 24th February 2022 regarding additional Russian persons and entities subject to sanctions, the board confirms that the manager is currently working to interpret the impact of the new sanctions on the company and its portfolio. Further announcements will be made if required. The company will pay its final and first interim dividends on 11th March 2022, as announced on 27th January 2022. The manager continues to monitor the situation in the region closely. The company remains invested and continues to operate within its stated objective and investment policies. The board is being kept fully abreast of developments. [We would reiterate our view that it is time to wave goodbye to the trust.]
  • Strategic Equity Capital (SEC) published a circular detailing its proposed tender offer, new buyback policy and share buyback programme. Adam Khanbhai has resigned from Gresham House and will no longer be involved in the investment management of the company. Ken Wotton continues as lead manager, a position he has held since September 2020. Liberum will take on responsibility for marketing the trust from abrdn.

We also have a fundraise from Polar Capital Global Financials, good news for Gresham House Energy Storage and reports from Greencoat Renewables, CQS New City High Yield and BB Healthcare.

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