24th Jul 2015 09:05
LONDON (Alliance News) - Small companies-focused investor Athelney Trust PLC on Friday said its net asset value per share rose in the first half of 2015, as its chairman said markets need to keep a close eye on events in China and Greece.
The trust said its net asset value per share at the end of June was 236 pence per share, up from 228p per share at the end of December and from 224.8 pence a year earlier. Chairman Manny Pohl said small companies "by-and-large" performed well in the first half.
In a wide-ranging commentary on first-half trading conditions, Pohl quoted economist John Maynard Keynes and theatrical team Gilbert & Sullivan, by way of Private Eye and Radio 4 programme 'More or Less'. He said international stock markets "have had to put up with a lot in the first half", including the General Election in the UK, the Greek debt crisis, and "wild price swings" in China.
"Is the global economy entering a soft patch? We are not in the danger zone yet, but there is only a thin safety buffer against any economic shock such as China devaluing the renminbi to make its exports more competitive and thus dealing the rest of the world a deflationary shock. With interest rates at an all time low there are alarmingly few tools in the box with which to combat the next down-turn should it come," Pohl said.
"When interest rates were cut to their lowest ever levels in March 2009, markets expected them to rise again within the year. More than six years later, rates remain the same and markets are still obsessed with the timing of a rise instead of how slowly or rapidly the rises will take place," he added
"My view is such rates will rise very, very slowly with every movement carefully signalled by the Fed and the Bank of England well in advance. Markets do not look particularly cheap but there are still pockets of good value in small companies and major oil, and I think we should continue to hold what we have," Pohl concluded, noting that the events in Greece and China will need to be "watched with great care".
Shares in the trust were untraded on Friday, having last traded at 222.50 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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