19th Jun 2014 10:50
LONDON (Alliance News) - The Bankers Investment Trust PLC Thursday reported a 2.2% fall in its net asset value per share over the first-half of its financial year, underperforming a 1.0% return from the FTSE All-Share Index during the same period, an outcome Chairman Richard Killingbeck called "disappointing."
Killingbeck said that the majority of the trust's regional managers outperformed their local indices on a relative basis. One exception was Europe, where the trust is "conservatively positioned" in Northern European companies, meaning it did not have as much as exposure to the bounce in Southern Europe. In addition, the trust's portfolio manager in North America has reorganised its investments in order to seek "a more growth orientated exposure to some key equity sectors and stocks which we expect to produce good results in the longer term."
The Chairman added that the trust expects to generate good income and capital returns over the longer term from its completed USD25.0 million investment in the local Chinese 'A' share market, which it has previously highlighted as having "valuation anomalies."
In the trust's 2013 annual report, the Chairman had said that it would probably be sensible to be cautious for returns in the year ahead despite a more encouraging economic picture, after a strong year for equity returns.
"The key contributors to these figures are currency moves and the shift across global markets toward the larger capitalised stocks and away from the mid-sized companies to which Bankers has a greater exposure," Killingbeck said in the company's statement Thursday.
The trust was also hit by its continued efforts to reduce its exposure to the UK market, due to the appreciation of the pound in the period, though Killingbeck noted that its increased overseas market and currency exposure has worked well for the trust over the longer term.
"Despite the lack of progress during the first six months of this year we remain positive towards equity markets in general. Corporate sentiment remains sound which continues to be demonstrated in corporate results, management statements and dividend increases. As has happened in the past equity supply in the form of new issues has helped fill some of the demand for equities at the margin but despite this we remain committed towards global equity markets as an asset class," Killingbeck said.
"Valuation levels are not excessive in most major markets and in some of the smaller markets recent falls have started to create some attractive opportunities," he added.
The Bankers Investment Trust shares were Thursday quoted at 567.00 pence, up 0.4%.
By Samuel Agini; [email protected]; @samuelagini
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