(Alliance News) - M&G Credit Income Investment Trust PLC on Thursday said its net asset value per share has risen since its initial public offering in November 2018.
Shares in M&G Credit Income, which aims to generate income with low asset value volatility, through its public and private debt investments, were down 0.2% at 107.34 pence in London on Thursday afternoon.
As at June 30, the company's NAV per share was 101.33 pence, having opened at 98.38p on November 14.
"This period presented good investment opportunities in public markets as the Company's investment programme commenced. Our investment manager was able to take advantage of investment grade corporate bonds performing strongly in the first quarter of 2019, with credit spreads tightening. High yield markets also made significant gains. The improving market continued into the second quarter, which put downward pressure on yields generally, amid falling expectations for global economic growth. With investors maintaining confidence in the major central banks to take action to prevent a slowdown, credit spreads remained tight as investors chased yield," said Chair David Simpson.
Private market opportunities were below M&G Credit Income's forecasts, with only 14% of its portfolio invested in private securities by the end of June, generating "a lower level of interest income than had originally been expected".
However, this was offset by a rise in the value of its investments.
"As a consequence of the reduction in yields over the period, higher than expected valuation growth has been achieved by the portfolio, thereby compensating for the lower level of income," said Simpson.
In July, M&G Credit Income announced a first 2.09p per share dividend covering its IPO to June 30.
"The global economic outlook is uncertain as a result of a range of factors such as Brexit, central bank policy and potential trade wars. This should present buying opportunities for the company," said the chair.
By Anna Farley; annafarley@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
M&g Credit Inc. (MGCI)