(Alliance News) - Tiger Resource PLC on Thursday said its net asset value fell in the first half of 2019 and blamed the US-China trade war, which has hurt the value of its investments.
The investment fund, which focuses on the natural resource sector, posted a June 30 NAV per share of 0.39 pence, just under the 0.40p NAV figure reported for the end of 2018. However, this was a much sharper drop from its 0.69p per share NAV in June 2018.
Chair Colin Bird said: "The trade war between China and the USA has been very damaging for metal and commodity prices and the effects are now being felt in China, with growth forecasts being cut going forward. This scenario continues to have a serious impact on the share valuations of various mining conglomerates with a magnified knock-on effect being experienced in the junior resource sector. The expected increases in base metal prices have not yet materialised and the only beneficiary from these adverse conditions is Gold, which always benefits during times of geo-political tension."
Bird also noted that smaller natural resources firms have had trouble raising cash for projects, with only companies at or near production able to raise funds.
The chair predicts geopolitical tensions will ease, with the trade war reaching "some form of resolution" and Brexit being "fudged".
"We as a board remain confident that the disposable income and new wealth creation in emerging markets will provide the catalyst on the demand side, whilst supply fundamentals continue to be very tight, due to existing mine closures and delays being experienced in the opening of new facilities to replace this lost production. This situation cannot continue without resulting in higher commodity prices, and we remain confident for the sector in the mid-term," said Bird.
Shares in Tiger Resource were untraded at 0.28 pence in London on Thursday.
By Anna Farley; annafarley@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
Tiger Resource (TIR)