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To provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments.
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Actuary63
Thank you for your informative reply@
Hello Zzzz91,
There are other high yielding investment trusts (e.g. NESF) with even more baffling prices.
I think prices will rebound when there is greater certainty about expected interest rate cuts.
When December's CPI figure came in lower than expected there was a rapid price rebound which reversed when January's CPI figure came in higher than expected.
March 20 is the date of the next CPI release, when the annual inflation rate is very likely to drop significantly. Let's see what happens then.
Having held SEQI since pre Covid I am baffled that it remains in this price range.
Quarterly dividends which rise every so often are the 'bees knees' to me in my retirement.
Are interest rate reductions needed?
It's a win win for investors. The buy backs mean the company saves the 8% it would pay to holders in dividends. If you don't need the dividend and are confident in the future of the trust then you're getting more shares at a knock down price
Does anyone have any knowledge of how the Dividend Reinvestment Policy is going to work? Are we getting part of the 90+ million shares held in treasury and paying twice, once through the buy back (loss of dividend) and again if purchased through drip?
Hello Kentio,
Sorry for the delay in replying. SEQI invests in both fixed and floating rate debt. With recent interest rate rises, the interest received on floating rate debt has risen, allowing a 10% increase in the dividend. New investments in fixed rate debt will also be made at higher yields. As these changes have arisen purely from higher interest rates, they will not produce sustained dividend growth in the future, and may be reversed if interest rates fall.
However, SEQI also has a policy of re-investing part of its interest income. It's original stated aim was a 1% per annum increase in net assets per share, and this should result in long-term dividend growth. Currently, it seems to be re-investing income in share buy-backs, which will have a similar long-term impact on net assets per share. This is justified by the large discount in the share price relative to net assets per share. So far, they've bought back about 3% of their share capital, which suggests the growth in net assets per share might be faster than 1% per annum.
Actuary, I will be very happy if there is future dividend growth but. hw do you think. the can be. achieved as I thought SEQI·s investments were at fixed rate -or - are they. variable? Grateful. for your. clarification .
That makes three of us!
Yes,I hope so to!
Steady climb back to 90p+ I hope!
Its own shares are probably the best investment it can make right now. The share price is starting to look silly - an 8% dividend yield with probable future dividend growth.
Yet another oversold infra debt. Added yet again. Getting tedious. :-))
Actually 6 purchases between 15th and the 23rd.
Roughly 500,000 to a million shares a week. See RNS for actual figures.
Looks like they have sold the fertiliser firm but not for all monies owed. Taking cut of the profits instead. No idea how much.
Sequoia normally uses up its revolving credit then issues new shares a bit below the recent price to shareholders and bit above to institutes,.
Can't do that until share price is above nav.
Nearly 50% of loans are on a variable rate.
Average of 4 years left on loans. They assume they can raise interest in the future for the fixed rate.
They say inflation in the fixed rate loans will make it easier to pay interest as most of the lender companies can increase prices in line with inflation.
Bulb has paid back £10 million so far.
Yes, very pleased to see the Directors making some chunky purchases which has reassured me there’s no significant underlying problem here.
Someone doesn’t like these, selling down to year lows.
Director buys.. see where this goes next week for another nibble. :-))
Great ER, screaming buy.
Had a couple of disasters. Not tulips.. Bulbs...
Dividend payment maintained with cover increasing slightly, and a very reassuring outlook being presented and so I’d expect the discount to NAV to narrow as it looks to be a bargain at this price.
This is proving a very poor investment at the moment. Even with the dividend taken into account it is well below the surface. Do hope the admin do not get bonus's
There are partial answers to my own Q - see the April/2022 Fact Sheet - Bulb is 1 of 3 re-structures - too much to repeat here. Presumably most of the loss here is already written down into the NAV 98.75 number, but they do anticipate furthers. I guess the larger issue is that since interest rates have stepped bigger and faster than the market had foreseen in Jan/2022, there is a reduction in asset values no matter what defaults.
The way things look right now - especially on growth stocks - it's more appropriate to avoid getting your own lights shot out before you think about shooting out any other lights. A 6+% divvy is fine if the SP doesn't go south.