EVERYBODY loves a sure-fire bet but these are as common as hen's teeth. This fund is as close to one as we have seen in a number of years and has little correlation with the stock market.
It does what it says on the tin; real estate in China: principally commercial property in Shanghai. While last year's rally saw the share price recovering a little, it is still priced on a near 65 per cent discount to its net asset value. Shareholders, perturbed by the persistent discount, requested the directors to come up with proposals to address this. The resulting strategic review agreed on a share buyback policy and a change of listing.
The buyback/tender was completed in the first quarter. This saw the share price rise by 40 per cent. The second and more important phase will later this month see the shares delisted from Aim and relisted in Singapore.
Similar funds listed in Singapore comfortably trade at very low discounts or small premiums. The Singapore fund will yield a healthy 6 per cent. This should see a discount rerating that would have a massive positive impact on the share price.
This article is for information and discussion purposes and does not form a recommendation by the manager to invest or otherwise.
Central Rand Gold
Broker says OUTPERFORM
CENTRAL Rand Gold is "a steal for new investors", according to RBC Capital Markets, after a $35 million fund raising by the miner. While noting the "very low" issue price, meaning the fund raising will be " hugely dilutive exercise", RBC said: "We believe the company remains a take-out target."
Broker says HOLD
AHEAD of tomorrow's first-quarter results, Numis has raised its recommendation on electronics group Premier Farnell from "reduce" to "hold". The broker noted: "Recovery in the US, and the benefits of the e-commerce and electronics components remain the key drivers for earnings. We continue to believe that the shares look fully valued."