IMS & July Update

RNS Number : 6388X

British Empire Sec & Gen Tst PLC

18 August 2009

 



BRITISH EMPIRE SECURITIES AND GENERAL TRUST PLC

Interim Management Statement (for the period 1 April 2009 to 31 July 2009)

In April the Company bought back 45,000 units of its Equities Index Unsecured Loan Stock 2013 for cancellation at a price of 195p per unit. There were no other material events during the period.

Performance Commentary

This investment management report relates to performance figures as at 31 July 2009.

Over the month NAV was up 4.8%1. This compares to an increase of 7.2%1 in the Benchmark2 and an increase of 7.0%1 for the MSCI World (£) index.

Financial year* to date, net asset value rose 4.0%1 compared to decreases of 2.9%1 for the FundData IT Global Growth2  and 2.4%1 for the MSCI World (£) indices.

Manager's Comment  - July 2009

Over the month the NAV rose strongly but underperformed an even greater rise in the benchmark. In part this is due to our decision to be a bit more cautious on the markets as the rally continued. Discounts on certain sectors (such as investment trusts and Japanese property companies) have narrowed and we have sold into strength. Our liquidity position has risen as a result. On one hand it is common wisdom not to 'fight the Fed' and the US Federal reserve seems increasingly determined to engineer an increase in asset prices through its pledge to keep policy rates 'exceptionally low' for an 'extended period'. The Bank of England appears to be taking a similar stance. Central Bank and government support may be enough to keep markets moving upwards. Some caution is warranted, however, because earnings growth, in many cases, is down to cost-cutting and is not repeatable. Earnings multiples in the equity markets may come to rest at lower levels than we have been used to in the past because of the lower potential growth in the economy. In this environment financially sound companies with stable or defensive cash flows ought to be attractive. As it happens, defensive companies have been overlooked in this rally and there is opportunity to re-invest some of our cash in them on attractive valuations and good dividend yields.

Statistics

	Value	% 1 mo	% 1 yr	% 3 yr	% 5 yr
Price (£)1	391.0	3.2	-7.8	-6.0	72.7
Net Asset Value1	400.8	4.8	-7.9	-4.9	60.2
Net Asset Value Total Return1		4.8	-6.1	-0.6	70.2
Benchmark1 (£)		7.2	-11.9	-4.9	41.3
Annual Returns (%)	2008	2007	2006	2005	2004
Price1	-22.3	-2.8	0.3	51.7	36.0
MSCI World1	-17.4	7.7	5.8	23.0	7.2

1 Source: Fundamental Data. Share price total return is on a mid-to-mid basis, with net income re-invested.

2 Fundamental Data Investment Trust Global Growth Index, official Benchmark from 1st October 2008

Top 10 Equity Holdings   %

Jardine Stategic	5.01
Sofina	5.00
Investor AB	4.94
Jardine Matheson	4.36
GBL	4.03
Vivendi	3.59
Electra	2.94
Swire	2.51
Paris Orléans	2.33
Holmen	2.17
Total	36.88

Capital Structure

Ordinary Shares	160,080,089
10 3/8% Debenture stock 2011	£8,514,940
8 1/8% Debenture stock 2023	£15,000,000
Equities index unsecured loan stock 2013**	2,635,996

Gross Assets/Gearing

Gross Assets	£670 mil.
Debt	£29.6 mil.
Actual Gearing (Debt less cash divided by net asset value)	-15.6%

Fund Codes

Bloomberg	Reuters Ticker / ISIN
BTEM	GB0001335081

Geographical Breakdown

Continental Europe	37.3%
Liquidity	19.0%
UK	16.0%
Asia Pacific	11.6%
Japan	7.8%
EMEA	4.6%
Canada / US	3.1%
Bermuda	0.6%

Further Information

Investment Manager - John Pennink, AVI Ltd. 

[phone] [e-mail]

The share price can be found under 'INVESTMENT COMPANIES' in The Financial Times, The Times, The Daily Telegraph, The Scotsman and The Evening Standard.

*British Empire Securities & General Trust financial year commences on the 1st of October.

** Last audited figure updated annually
# Book Values

Information may be found on the following websites.

www.british-empire.co.uk or www.assetvalueinvestors.com

Risk Factors you should consider before investing

Investment in the British Empire Securities and General Trust plc (the 'Trust') carries risks, which are more fully described in the Key Features Document.  Listed below are some of the key risks:

Investors are reminded that past performance is not a guide to future performance and that their capital will be at risk and they may therefore lose some or all of the amounts that they choose to invest in the Trust.

The Trust utilises gearing techniques (leverage) which exaggerate market movements both down and up and which could mean sudden and large falls in market value.

Movements in exchange rates can impact both the level of income received and the capital value of your investment. If the currency of your residence strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will reduce and vice versa.

As with all stock exchange investments the value of investment trust shares will immediately fall by the difference between the buying and selling prices.

Where investments are made in emerging market, unquoted securities or smaller companies, their potential volatility may increase the risk to the value of, and the income from the investment.

British Empire Securities and General Trust plc, 54 St James's Street, London SW1A 1JT, United Kingdom. Registered in England & Wales No: 28203

All figures as at 31 July 2009 unless otherwise stated. All sources Asset Value Investors Ltd unless otherwise stated. Asset Value Investors Limited ('AVI') is authorised and regulated by the Financial Services Authority ('FSA'). This document does not constitute an offer to buy or sell shares in the British Empire Securities and General Trust plc (the 'Trust'). The contents of this message are not intended to constitute, and should not be construed as, investment advice. Potential investors in the Trust should seek their own independent financial advice. AVI neither provides investment advice to, nor receives and transmits orders from, investors in the Trust nor does it carry on any other activities with or for such investors that constitute 'MiFID or equivalent third country business' for the purposes of the FSA's rules.

 

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