By Emma Wallis, News editor, Trustnet, 12 July 2024:
Chancellor Rachel Reeves has barely been in office a week but has already announced planning reforms to “get Britain building again”..
Labour promised in its manifesto to build 1.5 million new homes during the next five years and is establishing a housing task force to tackle stalled, large housing schemes. The new government also wants to release ‘grey belt’ areas of ugly but protected land.
All this bodes well for housebuilders and trusts that own them, such as Aurora Investment Trust, which holds Barratt and Bellway..
Greencoat UK Wind, which owns and operates UK wind farms, is in pole position as Reeves ends the ban on onshore wind farms. Not only will more wind farms be built, but Hewitt expects the value of the trust’s existing assets to rise..
Labour’s renewable push will also require more battery infrastructure to stabilise the grid, which could help some of the battery trusts which have been “massively out of favour”, Schooling Latter said..
Many infrastructure investment trusts are trading on wide discounts due to higher interest rates and borrowing costs but some of this pressure will ease as and when the Bank of England cuts rates.
James Carthew, head of investment companies at QuotedData, highlighted Downing Renewables & Infrastructure Trust (on a 34% discount) and Pantheon Infrastructure (on a 28% discount)..
Prime minister Keir Starmer has declared it his mission to “kickstart UK growth” and comes to power at a time when UK equity valuations are compelling, despite strong performance in recent months..
Carthew also pointed to “big bargains” and wide discounts in the UK Smaller Companies sector, naming Montanaro UK Smaller Companies (on a 14% discount), Rights & Issues (13%) and BlackRock Throgmorton (10%).
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