RE: Still wondering!9 May 2021 12:30
Just thought I would add this as something else on the subject hat might be interesting:
Paragraphs taken from latest report on CTY by Kepler:
"Over the past decade, City of London has nearly doubled its share count through being a consistent issuer of shares at a small premium to NAV. However, the board and Job recognize that in issuing shares at a premium, they also have an implicit (and certainly not guaranteed) obligation to buy shares back if a discount to NAV materialises. The board’s overall aim is that the share price “reflect[s] closely its underlying asset value” and aims to reduce discount volatility. While it does not believe it to be in shareholders’ interests to have a specific policy on issuance or buybacks, the board intends to consider issuance or buybacks “within a narrow band to NAV”.
... ... Share issuance activity at a premium and buying back at a discount is additive to existing shareholders. Depending on the year and level of activity, it makes a meaningful contribution to returns over and above the benchmark. Clearly, these sorts of activity cannot be relied on as a contributor to returns, but the graph below illustrates that the board’s issuance activities have consistently lessened the impact of City of London’s already attractive management fee structure "