Interim Management Statement
14 Settembre 2010 - 8:00AM
UK Regulatory
TIDMHFO
RNS Number : 5913S
Henderson Financial Opps Ltd
14 September 2010
HENDERSON FINANCIAL OPPORTUNITIES LIMITED
HENDERSON GLOBAL INVESTORS
HENDERSON FINANCIAL OPPORTUNITIES LIMITED
Interim Management Statement
Review of the period from 1 June 2010 to 31 August 2010
This Interim Management Statement has been prepared solely to provide additional
information to Shareholders as a body to meet the relevant requirements of the
UK Listing Authority's Disclosure and Transparency Rules, and should not be
relied upon by any other party or for any other purpose.
This Interim Management Statement may contain forward-looking statements that:
· have been made by the Directors in good faith based on the information
available to them up to the time of their approval of this Statement; and
· should be treated with caution due to the inherent uncertainties, including
both economic and business risk factors, underlying such forward-looking
statements.
This Interim Management Statement relates to the quarter from 1 June 2010 to 31
August 2010 and contains information that covers that period, unless otherwise
stated.
Material events and transactions
The report for the half-year ended 31 May 2010 was published on 15 July 2010.
On 13 September 2010 the Board announced that it intended to put proposals to
Shareholders to wind up the Company.
Portfolio Review:
The summer months have been particularly volatile for investing in the
Financials sector. The sector specific issues, which we highlighted in our last
report in July, such as regulation and sovereign credit risk saw some
incrementally positive news flow over this period as the release of the European
Banks stress tests and a watered-down version of the Basel III regulatory
framework for financials were the catalysts needed to provide a more solid
longer term investment case. However, the rallies were short lived as top down
macro economic concerns drove the markets lower. Investor sentiment focused on
the fear of growth slowdown and a potential "double dip" scenario. This was most
evident in the US10-year yields moving below 3% and the significant flattening
of the yield curve. The most important point however is that there were signs of
stress in all geographical regions, namely the US remains under pressure from
weak labour/housing readings, China on concerns of the overheating
property/construction sectors and Europe's need for significant fiscal
tightening stemming from growing concerns about sovereign risk and the fragility
of the banking sector.
The summer interim reporting season unfortunately failed to provide a positive
catalyst to earnings forecast upgrades as the lack of any signs of demand for
credit in the developed world outweighed more positive trends on loan loss
provisioning for the banks. In emerging markets, however, while the financials
are not immune from a global slowdown, the stronger growth outlook, better
deposit funding position and capitalisation helped them to outperform their
developed market peers. There were positive signs however for certain
sub-sectors within financials, the UK insurance sector was supported more
recently on M&A news, in particular RSA bidding for Aviva's general insurance
business.
The Company outperformed the benchmark over the last three months due to the
higher weighting in emerging markets, especially banks in South East Asia and
Russia, and more defensive holdings in the developed world, in particularly
Canada and developed Asia. Performance was also enhanced during this period by
taking an opportunity during the depths of Sovereign uncertainty in May and June
to invest in some high quality banks in continental Europe and the UK. These
companies such as Banco Santander, which saw a 35% increase in its share price
from early June to the end of July, have solid fundamentals, through a
diversified funding base and geographic business mix, and were trading on very
attractive valuation multiples. Poor performance was seen especially in the pure
advisory boutiques in the US such as Evercore, on the back of further regulatory
oversight and difficult capital markets business flows recently.
Financials globally offer compelling value for long term investments; however,
while the macro economic outlook remains unusually uncertain a more defensive
positioning continues to be a more prudent strategy.
Gearing:
The Company has a prime broker facility with Credit Suisse Securities (Europe)
Limited. Following the passing of the resolutions at the Extraordinary General
Meeting held on 14 September 2009 the Company has an objective of reducing and
then, as policy, maintaining the level of gearing no higher than 30 per cent. as
a proportion of net assets.
Dividends:
The Directors declared a third interim dividend on 13 September 2010 of 0.75p
per share which will be paid on 22 October 2010.
Discount:
The discount increased from 14.34% as at 31 May 2010 to 17.07% as at 31 August
2010.
PERFORMANCE AND FINANCIAL HIGHLIGHTS
+------------------------------------+--------+-------+--------+--------+
| Performance at 31 August 2010 | 3 | 1 | 3 | 5 |
| | months | year | years | years |
+------------------------------------+--------+-------+--------+--------+
| Share Price | -2.99 |-4.41 |-54.39 |-37.80 |
+------------------------------------+--------+-------+--------+--------+
| Net Asset Value per ordinary share | 2.16 |-5.18 |-48.84 |-31.43 |
+------------------------------------+--------+-------+--------+--------+
| MSCI World Financials Index | -5.16 |-2.51 |-29.87 |-15.47 |
+------------------------------------+--------+-------+--------+--------+
Sources: AIC Services Limited and Datastream
+------------------------------------+----------------+----------------+
| Financial Position | At 31 August | At 31 May 2010 |
| | 2010 | |
+------------------------------------+----------------+----------------+
| Net assets (GBP'000) | 14,944 | 14,912 |
+------------------------------------+----------------+----------------+
| Net asset value per ordinary share | 39.19p | 39.11p |
| (including current period revenue) | | |
+------------------------------------+----------------+----------------+
| Ordinary share price (mid-market | 32.50p | 33.50p |
| price) | | |
+------------------------------------+----------------+----------------+
| Discount | 17.07% | 14.34% |
+------------------------------------+----------------+----------------+
| Gearing (total assets/net assets) | 1.23 | 1.37 |
+------------------------------------+----------------+----------------+
| Equity Gearing | 91.15 | 112.16 |
+------------------------------------+----------------+----------------+
THE PORTFOLIO
+----------------------------+----------+--------------+------------+
| | | % of net | % of net |
| | | assets at 31 | assets at |
| Top 10 Investments | | August 2010 | 31 May |
| | | | 2010 |
+----------------------------+----------+--------------+------------+
| Banque Cantonale Vaudoise | | 5.87 | 4.53 |
+----------------------------+----------+--------------+------------+
| ICBC Asia | | 4.06 | 2.54 |
+----------------------------+----------+--------------+------------+
| Personal Group Holding | | 3.52 | 3.71 |
+----------------------------+----------+--------------+------------+
| Toronto-Dominion | | 3.21 | 2.64 |
+----------------------------+----------+--------------+------------+
| New York Community Bancorp | | 2.92 | 2.11 |
+----------------------------+----------+--------------+------------+
| SVG Capital conv bonds | | 2.77 | 2.37 |
| 30/05/16 | | | |
+----------------------------+----------+--------------+------------+
| Jardine Strategic | | 2.62 | 0.73 |
+----------------------------+----------+--------------+------------+
| HSBC | | 2.44 | 1.66 |
+----------------------------+----------+--------------+------------+
| Investec Finance 7.75% | | 2.17 | 1.90 |
+----------------------------+----------+--------------+------------+
| F&C Finance Asset | | 2.10 | 1.88 |
| Management 9% | | | |
+----------------------------+----------+--------------+------------+
+--------------------------+--------------+-------------+
| Geographic Breakdown | % of | % of |
| | portfolio at | portfolio |
| | 31 August | at 31 May |
| | 2010 | 2010 |
+--------------------------+--------------+-------------+
| United Kingdom | 32.36 | 33.47 |
+--------------------------+--------------+-------------+
| Switzerland | 11.89 | 11.19 |
+--------------------------+--------------+-------------+
| USA | 11.70 | 19.47 |
+--------------------------+--------------+-------------+
| Hong Kong | 6.92 | 4.03 |
+--------------------------+--------------+-------------+
| Singapore | 5.90 | 1.96 |
+--------------------------+--------------+-------------+
| Canada | 5.81 | 5.87 |
+--------------------------+--------------+-------------+
| Brazil | 5.31 | 2.31 |
+--------------------------+--------------+-------------+
| Malaysia | 3.87 | 1.83 |
+--------------------------+--------------+-------------+
| France | 2.99 | 3.16 |
+--------------------------+--------------+-------------+
| Norway | 2.87 | 3.77 |
+--------------------------+--------------+-------------+
+---------------------------+--------------+-------------+
| Sector Breakdown | % of | % of |
| | portfolio at | portfolio |
| | 31 August | at 31 May |
| | 2010 | 2010 |
+---------------------------+--------------+-------------+
| Banks | 44.3 | 42.9 |
+---------------------------+--------------+-------------+
| Non-Life Insurance | 16.4 | 14.2 |
+---------------------------+--------------+-------------+
| Life Insurance | 1.7 | 4.9 |
+---------------------------+--------------+-------------+
| Investment Companies | 1.2 | 1.4 |
+---------------------------+--------------+-------------+
| General Financial | 11.4 | 15.7 |
+---------------------------+--------------+-------------+
| Real Estate | 4.6 | 2.9 |
+---------------------------+--------------+-------------+
| Fixed Income | 20.3 | 17.9 |
+---------------------------+--------------+-------------+
Investment Objective
The investment objective of the Company is to maximise total return from a
global portfolio of investments in financial companies whilst recognising the
importance of dividend income to shareholders.
The Company will seek to achieve its investment objective by investing
predominantly in equity, debt or other securities of listed financial companies.
The Manager is Henderson Global Investors Limited. Further information on the
Company, including an up to date net asset value and share price information,
can be found at www.henderson.com/financialopportunities.
For further information, please contact:
Emily Adderson
Portfolio Manager
Henderson Global Investors Limited
Telephone: 020 7818 6005
James de Sausmarez
Head of Investment Trusts
Henderson Global Investors Limited
Telephone: 020 7818 3349
Sarah Gibbons-Cook
Investor Relations and PR Manager
Henderson Global Investors Limited
Telephone: 020 7818 3198
David Benda
Director Corporate Broking
Numis Securities Limited
Telephone 020 7260 1275
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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