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Hi Etotheipi, like you, I expected a positive correction this morning but were already down by almost a further 4% as I write. I'm led to believe the relationship building process between the USA & China might take more time than expected hence the drop yesterday and what appears to be a crossover or hangover period taking us into today. Not great I know. It feels like we're in the midst of a perfect storm in so far as equities are concerned so we may well be in for a period of high volatility. Fingers crossed I'm wrong & matters settle down fast.
Hi Phyl, it looks like it's been investment trust carnage, mainly global, US and China. Comments by the fed have turned the US markets around so hopefully a blue day tomorrow. Probably would have been good to have topped up today.
Hi Etotheipi, many thanks for your thoughts into why the the SP has dropped by over 8% today indeed a general downward trend. Let's hope we see a more positive correction over the coming days. Could be an opportunity to average down.
Having been watching JPMorgan managing the premium buy issuing shares almost everyday for 9 months, I hope they start managing the discount by buying shares if needed. I'm guessing the fall in the NAV is due to the Chinese government imposing stricter capital requirements for lending maybe hitting Alibaba's profits. I still think the case for the longterm outperformance of China remains.
Hi laallee, I believe we all think that way when faced with similar circumstances. Like we've somehow put a dark spell on the SP. Up to now, this has been a fantastic trust to own particularly if one is a longer term holder. The markets appear to be in absolute disarray right now. Little or no investor confidence due to fear of inflation, profit taking, USA bonds, & equities that appear to be overpriced versus balance sheets plus debt etc. Not to mention a falling market. Time will tell as always but the SP is more than likely than not to bounce back. Might be a question of holding your nerve.
Yes, I bought in last week and I am now 16% down......I apologise to all long term holders!
With NAV at 744 & SP now 720 on paper, this is incredibly good value!
For such a large fund there doesn't appear to be much of a board presence for some reason? But hopefully this will start something good, bad or indifferent..
With NAV at 744 and SP falling to 766 are we seeing an expected correction?
I listen to a podcast about investment trusts called money makers, a while ago the presenter mentioned that PHI ran out treasury shares so couldn't control the share price (premium/discount) as JCGI do, even though they wanted to. They then had to organise an EGM to get shareholder approval to create a large quantity of treasury shares to bring the share price closer to the NAV over time. My guess is that the gap will close so JCGI is a better bet for now.
Thanks for your feedback. I've been looking at PHI for additional exposure to the wider region, but the SP is 10% higher than the NAV, which is stopping me pushing the button. Average SP/NAV premium has been just over 3%. What's the general consensus in this scenario - wait for the premium to shrink, or the issue of equity to bring it down closer to the trend? Thanks EG
Today's RNS has got to be a good thing right? and yet the SP has dropped 10p at the time of writing!
Gewillia, like you, I jumped aboard this train back in December & have been enjoying the ride. I also bought PHI at the same time (not exactly an apples-for-apples comparison, but it's enjoyed a similar rise).
For my sins I did buy FCSS earlier this week (for a little extra exposure to the sector), although that's not started well. Mind you: things have shuddered to a halt here, too, over the last few days.
I'll be doubling down here on any significant dips (which I think is likely). GLA.
Opps Everglade, I just took a boo at the NAV and saw the reasons for your question. Investment Trusts want to grow , like any other plc. When their SP is at a premium to the NAV, they can, with shareholder permission, issue new shares to punters for cash. This enables the plc to make further investments in more shares in other plc's.
It also makes thee and me a few millionths of £1 richer, when an investor pays £7.84 for a share that is backed by assets of only £7.60. The plc (us) makes a profit of 25,000 times 24p, or roughly £6,200. The reverse of a dilution.
Many IT's are currently at a premium and so raising extra cash furiously, which they filter back into the market, so causing NAV's to rise generally and SP's with them. Investing institutions are very cash rich right now, with few profitable alternatives to invest in elsewhere. Quite how much of an effect on the overall market this is having, I have no idea, but it must be having some.
There's no such thing as a daft question, Everglade. The only way any of us learn is by asking questions. These trades have to be disclosed because technically it's against the law for a plc to trade in it's own shares, unless it has the shareholders permission. Every RNS will explain to you the reason for the issuance or award.
There are a whole variety of reasons a plc may have permission to trade in it's own shares, usually buying them; this can include an Employees Share Ownership Plan and the granting of options to employees or directors. As you say, there's a minimal dilution when a plc with a float of 500 million shares issues a few tens of thousands and it's really just moving shares around.
I logged on here because I've just bought a second helping. The first having gone up by 20+% since purchase back in early December. Seems to be well managed and doing better than FCSS.
Maybe a daft question, but are these transactions a dilution, or moving shares from one pot to another and meaningless from a SP perspective? Cheers
Has been a very solid performer and looks like it will probably continue looking at the economic forecasts.
yet no comments. Crazy. China is predicted to have a 10% GDP growth in 2021, probably the only major economy to have positive GDP growth next year due to being practically COVID19 free. Only 2 other IT competitors and one of those is 35% Japan (Baillie Gifford). It looks like the FM positioned for the trade war with the US which turned out to be the right strategy for COVID19. The only downside is the lack of skin in the game from the directors.
Indepthwins Certainly they have done very well, but with china acting as they are,is it a good time to be invested in chinese stocks?? Do I sale now, that is the question??