16th Sep 2016 11:15
LONDON (Alliance News) - The Merchants Trust PLC on Friday reported growth in its net asset value total return in the first half of its financial year, but missed its benchmark.
The trust said its NAV total return increased by 4.9% in the six months ended July 31, against its benchmark the FTSE 100 Index, which increased by 13%.
The Merchants Trust said natural resources, internationally-exposed sectors and more defensive industries performed well, while domestic, cyclical and financial sectors were weak.
Mining was the strongest sector, thanks to contributions from Anglo American PLC and Glencore PLC, while oil stocks such as Royal Dutch Shell PLC and BP PLC also performed well. Other notable performers included British Gas owner Centrica PLC, pharmaceutical giant GlaxoSmithKline PLC and the tobacco sector.
Meanwhile, the general retail sector was weak, with particularly poor performances from clothing retailers Next PLC and Marks & Spencer Group PLC, while media giant ITV PLC, telecom companies BT Group PLC and Vodafone UK, British Airways owner International Consolidated Airlines Group SA, pub company Greene King PLC, and construction companies Kier Group PLC and Balfour Beatty PLC also performed poorly. Satellite communications firm Inmarsat PLC was the worst performer.
The financials sector was more mixed, with Standard Chartered PLC and HSBC Holdings PLC performing well, while Barclays, Lloyds Bank PLC, Standard Life PLC and Royal Bank of Scotland PLC performed poorly.
"The vote to leave the EU has increased uncertainty around the outlook for the UK economy. However the UK stock market is distinct from the UK economy. Most large British companies have substantial overseas operations and may even benefit from sterling weakness. Sections of the UK stock market look more fully valued, after a strong recovery so far this year. However, our fund managers are still finding many attractive investment opportunities, capable of delivering a combination of income and capital growth," Chairman Simon Fraser said in a statement.
"With government bonds and cash offering negligible income, we believe that Merchants' high yield, generated from a diversified portfolio of reasonably valued equities, is particularly well suited to the current environment," he added.
Shares in Merchants Trust were trading down 0.7% at 419.14 pence on Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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