BSRT : Baker Steel Resources Trust reports underperformance in the first half of 2014
Baker Steel Resources Trust‘s recent interims report a 14.5% fall in the trusts NAV (in sterling terms) during the first of 2014. This compares against a rise in the Euromoney Global Mining 100 Index of 1.2% (in sterling terms).
The largest contributor to the fall was Gobi Coal & Energy. This suffered a 50% write down to its carrying value, reflecting the performance of listed Mongolian coal shares over the previous 12 months, which is a reflection of the low global price for metallurgical coal. The manager however remains positive citing that Gobi Coal’s Shinejinst project is of high quality (large and open pit), and will be well-placed to satisfy China’s future coal requirements once the market has normalised. Ivanhoe Mines was the second largest contributor to the fall in the NAV. Ivanhoe’s share price fell 27.3% in CAD terms despite making progress at all three of its main projects. As at 30 June 2014, BSRT was fully invested. Unquoted investments accounted for 69.9% of BSRT’s NAV, whilst quoted investments accounted for 30.4%.
Baker Steel Resources seeks long term capital growth by investing in a focused global portfolio of the equity securities of natural resources companies. It predominantly invests in unlisted companies but also invests in listed securities with a view to exploiting market inefficiencies and pricing anomalies.