Interim Management Statement
14 September 2009 - 9:04PM
UK Regulatory
TIDMNST
RNS Number : 0035Z
New Star Financial Opp Fd Ltd
14 September 2009
NEW STAR FINANCIAL OPPORTUNITIES FUND LIMITED
HENDERSON GLOBAL INVESTORS
NEW STAR FINANCIAL OPPORTUNITIES FUND LIMITED
Interim Management Statement
Review of the period from 1 June 2009 to 31 August 2009
This Interim Management Statement has been prepared solely to provide additional
information to Shareholders as a body to meet the relevant requirements of the
UK Listing Authority's Disclosure and Transparency Rules, and should not be
relied upon by any other party or for any other purpose.
This Interim Management Statement may contain forward-looking statements that:
* have been made by the Directors in good faith based on the information available
to them up to the time of their approval of this report; and
* should be treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying such forward-looking statements.
This Interim Management Statement relates to the quarter from 1 June 2009 to
31 August 2009 and contains information that covers that period, unless
otherwise stated.
Material events and transactions
The half yearly report for the six months ended 31 May 2009 was published on 29
July 2009.
An Extraordinary General Meeting was held on 14 September 2009 and approved the
following proposals:
? a continuation of the Company's exposure to financial companies under the
management of Guy de Blonay at Henderson Global Investors Limited, but with a
revised and broader investment policy encompassing investment opportunities on a
global basis with the aim of maximising the total return to Shareholders without
the constraint of a very high yield target;
?a change of the benchmark for measuring the Company's investment performance to
the MSCI World Financials Index (and making a consequential amendment to the
Investment Management Agreement) to reflect the proposed broader investment
policy;
? as part of the revised investment policy, the objective of reducing and
then, as policy, maintaining the level of gearing no higher than 30 per cent. as
a proportion of net assets;
? an initial continuation, using the Company's revenue reserves, and then
change of the Company's dividend policy with the aim of a sustainable level of
total dividend, which represents an attractive proposition in current market
conditions;
? an amendment to the Company's accounting policy to reflect the proposed
revised investment policy and dividend policy;
?to give Shareholders the opportunity to vote on the continuation of the Company
as an investment company at the Annual General Meeting to be held in 2011
(subject to certain caveats, as noted below). If Shareholders vote against the
continuation of the Company at that meeting then proposals will be put to
Shareholders within three months to wind up or otherwise reconstruct the
Company. Caveat - In the event that the Company successfully undertakes a
significant fund-raising prior to the date of the Annual General Meeting in
2011, the Directors, in their absolute discretion, may decide that it would no
longer be appropriate to have a continuation vote in 2011. In these
circumstances, a resolution for the Company to continue would still be proposed
in 2014; and
? a change of the Company's name to "Henderson Financial Opportunities
Limited".
The Directors are not aware of any other significant events or transactions up
to the date of this report which would have a material impact on the financial
position of the Company.
Portfolio Review:
Global equity markets continued to rally over the summer months as risk appetite
increased, driven by signs of a quicker than expected recovery in the global
economy. Few, had anticipated that for example Germany, France and Japan would
be at least technically out of recession in the second quarter or that US job
losses would show signs of levelling off. Financials was a top performing sector
as the second quarter reporting season kicked off a wave of analyst upgrades as
companies reported better than expected numbers. In particular, banks' wholesale
revenues surprised positively while credit costs did not generally show the
significant deterioration which had been expected. The improved investor
sentiment saw a few banks opportunistically tapping the market for capital to
shore up their balance sheets or repay government support capital. The banks
outperformed all other sub-sectors within the financials sector over the period.
The financials sector has seen a swift re-rating from the March 2009 lows as
investors shifted their focus from crisis valuations or nationalisations to
normalised valuations in light of the stabilising macroeconomic environment. As
many share prices are now near pre-Lehman levels and the influence of the global
macro-economic landscape has been factored in, the focus now will be to invest
in those companies which have internal specific drivers for earnings recovery.
The portfolio, therefore, is looking to invest in high quality names which offer
compelling value driven by strong balance sheets, healthy cash flow and stable
dividends or have a high probability of returning to consistent dividend
payments.
On geographical allocation, the portfolio has increased its weighting to areas
outside of the UK and Europe, in particular, into the US and Asia. Asia
provides an interesting opportunity for stock picking in this current
environment. The favourable macro backdrop as well as large government fiscal
stimulus packages provides stability to the investment rationale. In particular,
in Hong Kong, China and Singapore, the banking system did not suffer from the
financial crisis to the extent of their Western peers as they were not exposed
to the structured products, are better capitalised and are not facing an
over-indebted consumer. Chinese banks continue to see positive loan growth and
are gradually improving their business mix to higher margin products.
The asset split within the portfolio has seen the fixed income portion reduced
to around 25% over the past three months. Bonds have been disposed of after
spreads narrowed and the proceeds were reinvested into equities, which offered
the potential for capital growth. Whilst we understand the importance of the
fixed income portfolio to generate a revenue stream, the portfolio looks well
placed to cover the expected full year 3p per share dividend.
Gearing:
The Company has a prime broker facility with Credit Suisse Securities (Europe)
Limited. Following the passing of the resolutions at the Extraordinary General
Meeting held on 14 September 2009 the Company has an objective of reducing and
then, as policy, maintaining the level of gearing no higher than 30 per cent. as
a proportion of net assets.
Dividends:
The Directors declared a third interim dividend on 14 September 2009 of 0.75p
per share which will be paid on 30 October 2009.
Discount:
The discount widened from 14.70% as at 31 May 2009 to 17.74% as at 31 August
2009
PERFORMANCE AND FINANCIAL HIGHLIGHTS
+-------------------------------------------+----------+--------+---------+---------+
| Performance at 31 August 2009 | 3 months | 1 year | 3 years | 5 years |
+-------------------------------------------+----------+--------+---------+---------+
| Share Price | 23.6% | -35.2% | -46.7% | -2.9% |
+-------------------------------------------+----------+--------+---------+---------+
| Net Asset Value per ordinary share | 28.2% | -24.1% | -42.6% | -7.4% |
+-------------------------------------------+----------+--------+---------+---------+
| MSCI World Financials Index | 19.2% | -13.8% | -34.3% | -15.0% |
+-------------------------------------------+----------+--------+---------+---------+
Sources: AIC Services Limited and Datastream
+-------------------------------------------+--------------------+--------------------+
| Financial Position | At 31 August 2009 | At 31 May 2009 |
+-------------------------------------------+--------------------+--------------------+
| Net assets (GBP'000) | 15,759 | 12,298 |
+-------------------------------------------+--------------------+--------------------+
| Net asset value per ordinary share | 41.33p | 32.25p |
| (including current period revenue) | | |
+-------------------------------------------+--------------------+--------------------+
| Ordinary share price (mid-market price) | 34.00p | 27.50p |
+-------------------------------------------+--------------------+--------------------+
| Discount | 17.74% | 14.70% |
+-------------------------------------------+--------------------+--------------------+
| Net Gearing | 78% | 69% |
+-------------------------------------------+--------------------+--------------------+
THE PORTFOLIO
+-------------------------+------+------------------+------------------+
| Top 10 Investments | | % of net assets | % of net assets |
| | | at 31 August | at 31 May 2009 |
| | | 2009 | |
+-------------------------+------+------------------+------------------+
| Bank of America | | 10.5 | 0.0 |
+-------------------------+------+------------------+------------------+
| Banque Cantonale | | 6.3 | 4.7 |
| Vaudoise | | | |
+-------------------------+------+------------------+------------------+
| Personal Group Holdings | | 5.7 | 6.7 |
+-------------------------+------+------------------+------------------+
| DnB NOR | | 5.6 | 6.3 |
+-------------------------+------+------------------+------------------+
| Barclays | | 5.3 | 0.4 |
+-------------------------+------+------------------+------------------+
| JP Morgan Chase | | 4.8 | 0.0 |
+-------------------------+------+------------------+------------------+
| Natixis | | 4.4 | 0.0 |
+-------------------------+------+------------------+------------------+
| UBS | | 3.9 | 0.0 |
+-------------------------+------+------------------+------------------+
| Alpha Bank | | 3.9 | 1.2 |
+-------------------------+------+------------------+------------------+
| Investec 7.75% | | 3.7 | 3.7 |
+-------------------------+------+------------------+------------------+
+--------------------------------+------------------+----------------+
| Geographic Breakdown | % of portfolio | % of portfolio |
| | at 31 August | at 31 May 2009 |
| | 2009 | |
+--------------------------------+------------------+----------------+
| United Kingdom | 41.8 | 54.1 |
+--------------------------------+------------------+----------------+
| United States | 14.8 | 0.0 |
+--------------------------------+------------------+----------------+
| Switzerland | 9.5 | 8.1 |
+--------------------------------+------------------+----------------+
| France | 7.5 | 7.1 |
+--------------------------------+------------------+----------------+
| Norway | 6.0 | 6.5 |
+--------------------------------+------------------+----------------+
| Germany | 3.3 | 5.3 |
+--------------------------------+------------------+----------------+
| Greece | 3.2 | 1.5 |
+--------------------------------+------------------+----------------+
| Hong Kong | 2.8 | 0.0 |
+--------------------------------+------------------+----------------+
| Italy | 2.2 | 2.6 |
+--------------------------------+------------------+----------------+
| Ireland | 1.6 | 0.0 |
+--------------------------------+------------------+----------------+
| Other | 7.3 | 14.8 |
+--------------------------------+------------------+----------------+
+--------------------------------+------------------+----------------+
| Sector Breakdown | % of portfolio | % of portfolio |
| | at 31 | at 31 May 2009 |
| | August 2009 | |
+--------------------------------+------------------+----------------+
| Banks | 40.8 | 25.9 |
+--------------------------------+------------------+----------------+
| Non-Life Insurance | 13.2 | 14.9 |
+--------------------------------+------------------+----------------+
| Life Insurance | 6.2 | 6.5 |
+--------------------------------+------------------+----------------+
| Investment Companies | 1.6 | 4.9 |
+--------------------------------+------------------+----------------+
| General Financial | 11.8 | 8.5 |
+--------------------------------+------------------+----------------+
| Real Estate | 1.4 | 5.9 |
+--------------------------------+------------------+----------------+
| Fixed Income | 25.0 | 33.4 |
+--------------------------------+------------------+----------------+
| | | |
+--------------------------------+------------------+----------------+
Investment Objective
The investment objective of the Company is to maximise total return from a
global portfolio of investments in financial companies whilst recognising the
importance of dividend income to shareholders.
The Company will seek to achieve its investment objective by investing
predominantly in equity, debt or other securities of listed financial companies.
The Manager is Henderson Global Investors Limited. Further information on the
Company, including an up to date net asset value and share price information,
can be found at www.henderson.com/financialopportunities.
For further information, please contact:
Guy de Blonay
Portfolio Manager
Henderson Global Investors Limited
Telephone: 020 7818 3528
James de Sausmarez
Head of Investment Trusts
Henderson Global Investors Limited
Telephone: 020 7818 3349
Sarah Gibbons-Cook
Investor Relations and PR Manager
Henderson Global Investors Limited
Telephone: 020 7818 3198
David Benda
Director Corporate Broking
Numis Securities Limited
Telephone 020 7260 1275
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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