Aberdeen Asia Focus (AAS) beat its benchmark by 29.4% over the five years to 31 July, passing the performance test that would otherwise have triggered a tender offer. The board says a new five-year performance test period began on 1 August. As before, if the trust fails to at least match its benchmark over this period, the board will put forward proposals for a 25% tender offer at a price close to net asset value (NAV).
QuotedData’s James Carthew said: “Not only has Aberdeen Asia Focus beaten its benchmark over five years, it has also outperformed its peers by some margin. That makes its current 9.2% discount look a bit odd to me. It also reinforces my belief that these performance-triggered tenders don’t have much impact on the day-to-day discount. However, that doesn’t mean that they don’t have a role to play.”
Foresight Solar (FSFL) says its NAV per share fell from 99.2p to 94.9p over the second quarter to 30 June. The fall reflects higher UK bond yields (which pushed up the discount rate used to value future cashflows), lower-than-budgeted generation (see below) in Spain and Australia, lower power price forecasts – partly on the back of hopes of an end to the Iran war, the removal of carbon price support, and adverse foreign exchange movements. In Spain, the problem is too much solar, not enough storage. Power was generated but the grid rejected it. In Australia, it wasn’t as sunny as expected. Since the end of the quarter, UK day-ahead electricity prices have risen in reaction to consecutive heatwaves, low wind output and tighter gas markets. Renewed Middle East tensions have added pressure to natural gas prices. The company says that solar generators are likely to benefit from these factors, as well as from the sunniest month on record in July.
QuotedData’s James Carthew said: “Another quarter, another power price related NAV fall. One hope might be that the current discussions – around allowing UK renewable plants commissioned before the government instituted its contracts-for-difference scheme to opt into this – translate into more predictable revenue streams for these companies. In the meantime, Foresight Solar is doing its best to hedge short-term power prices”.
