44 Wednesday May 25 2022 | the times
BusinessMarkets
news in brief
Racism rife for women
Three quarters of women from
ethnic minority backgrounds
have experienced racism at work,
a report from the Fawcett Society
and the Runnymede Trust says.
The report, which surveyed
nearly 2,000 women of colour,
with a comparison group of 1,182
white women, found that 61 per
cent of ethnic minority women
had changed aspects of
themselves, such as their names,
to fit in. It found that women
from Pakistani, Bangladeshi or
Indian backgrounds were most
likely to report a manager for
blocking their career progression.Clipper deal complete
Clipper Logistics said that its
£943 million cash-and-shares
acquisition by the United States-
based GXO Logistics had been
completed, after the sanction of
the scheme by the High Court on
Friday. Clipper shareholders “will
receive 0.0359 new GXO shares
and 690 pence in cash”, Clipper
said. New GXO shares have been
approved for listing in New York,
taking effect on Friday. Clipper,
which floated in 2014 at £1 a
share, has been propelled by the
growth of online shopping.Britishvolt powers up
Britishvolt, the electric vehicle
battery start-up, is to buy EAS, a
German battery cell maker, for
€36 million to help it increase its
own production. Britishvolt called
EAS, owned by Monbat, of
Bulgaria, a “pioneer in producing
large-format lithium-ion cells
using innovative and compact
electrode production technology”.
Britishvolt is working with Aston
Martin and Lotus, the British
sports car marques, to develop
high-performance electric vehicle
batteries.Digital tax delayed
The Organisation for Economic
Co-operation and Development
acknowledged for the first time
that a global digital tax deal may
take a year longer to implement.
The deal, which the organisation
had hoped to sign off on this
summer, would give other
countries a bigger share of the tax
take on the earnings of large US
digital groups such as Apple and
Alphabet’s Google. The overhaul
includes plans for a global
minimum corporate tax of 15 per
cent on big multinationals.Commodities
ICIS pricing (London 7.30pm)Crude Oils ($/barrel FOB)
Brent Physical 115.18 -0.20
BFOE(Apr) 113.71 +0.14
BFOE(May) 110.86 -0.09
WTI(Apr) 109.77 -0.52
WTI(May) 107.20 -0.34Products ($/MT)Spot CIF NW Europe (prompt delivery)
Premium Unld 1212.00 1212.00 -30.00
Gasoil EEC 1093.75 1095.75 +22.25
3.5 Fuel Oil 620.00 620.00 +0.00
Naphtha 890.00 891.00 -36.00ICE Futures
Gas Oil
Jun 1086.75-1081.25 Sep 1013.75-1011.75
Jul 1055.00-1054.50 Oct 1021.75-994.50
Aug 1029.00-1028.75 Volume: 559180Brent (9.00pm)
July 113.48-113.46 Oct 106.06-105.20
Aug 110.77-110.75 Nov 104.13-99.00
Sep 108.25-108.16 Volume: 1673979LIFFE
Cocoa
Jul 1731-1730 Sep 1832-1790
Sep 1752-1750 Dec 1790-1790
Dec 1792-1790 Mar 1725 BID
Mar 1792-1791
May 1833-1790
Jul 1796-1790 Volume: 66855RobustaCoffee
May 2300-2050 Jan 2032-2010
Jul 2045-2043 Mar 2036-1997
Sep 2048-2038
Nov 2049-2022 Volume: 10817White Sugar (FOB)
Reuters Mar 532.10-529.90
May 524.40-521.00
Aug 557.20-557.10 Aug 516.50-514.30
Oct 545.00-540.50 Oct 545.00-540.50
Dec 535.50-533.40 Volume: 60143PRICES
Major indices
New York
Dow Jones 31928.62 (+48.38)
Nasdaq Composite 11264.45 (-270.83)
S&P 500 3941.48 (-32.27)
Tokyo
Nikkei 225 26748.14 (-253.38)
Hong Kong
Hang Seng 20112.10 (-357.96)
Amsterdam
AEX Index 679.88 (-14.14)
Sydney
AO 7373.20 (-25.70)
Frankfurt
DAX 13919.75 (-255.65)
Singapore
Straits 3195.04 (-18.61)
Brussels
BEL20 3892.83 (-45.62)
Paris
CAC-40 6253.14 (-105.60)
Zurich
SMI Index 11483.56 (+17.28)
DJ Euro Stoxx 50 3647.56 (-60.83)
London
FTSE 100 7484.35 (-29.09)
FTSE 250 19849.82 (-296.36)
FTSE 350 4160.97 (-23.17)
FTSE Eurotop 100 3281.20 (-30.91)
FTSE All-Shares 4126.79 (-23.49)
FTSE Non Financials 5069.71 (-35.68)
techMARK 100 6062.10 (-32.76)
Bargains n/a
US$ 1.2519 (-0.0045)
Euro 1.1667 (-0.0096)
£:SDR 0.98 (+0.00)
Exchange Index 80.24 (+0.10)
Bank of England official close (4pm)
CPI 120.04 Apr (2015 = 100)
RPI 334.60 Apr (Jan 1987 = 100)
RPIX 290.10 Jun (Jan 1987 = 100)
Morningstar Long Commodity 677.16 (+5.72)
Morningstar Long/Short Commod4703.45 (+27.75)London Financial Futures
Period Open High Low Sett Vol Open Int
Long Gilt Jun 22 118.04 119.30 117.92 119.12 530402 637434
Sep 22 117.38 118.63 117.27 118.46 284203 20052
3-Mth Sterling Jun 22 99.025 99.045 99.015 99.026 10377 232459
Sep 22 98.885 98.890 98.860 98.866 3885 301735
Dec 22 98.820 98.825 98.790 98.806 7310 347378
Mar 23 98.785 98.795 98.755 98.771 8310 229855
Jun 23
3-Mth Euribor Jun 22 100.24 100.25 100.22 100.24 91154 452988
Sep 22 99.625 99.650 99.605 99.630 153026 513520
Dec 22 99.235 99.255 99.200 99.235 169116 599048
Mar 23 98.885 98.925 98.840 98.905 126073 473699
Jun 23 98.620 98.695 98.575 98.680 98051 407468
3-Mth Euroswiss Jun 22 100.71 100.72 100.70 100.71 925 29152
Sep 22 100.68 100.68 100.67 100.68 710 31355
Dec 22 100.61 100.62 100.59 100.62 488 22748
Mar 23
FTSE100 Jun 22 7461.0 7517.5 7416.0 7473.5 83131 608872
Sep 22 7385.5 7461.0 7385.5 7420.0 15 8102
FTSEurofirst 80 Jun 22 5046.5
Sep 22 5035.0© 2022 Tradeweb Markets LLC. All rights reserved.
The Tradeweb FTSE Gilt Closing Prices information contained
herein is proprietary to Tradeweb; may not be copied or
re-distributed; is not warranted to be accurate, complete or timely; and does not constitute
investment advice. Tradeweb is not responsible for any loss or damage that might result
from the use of this information.rising interest rates and bond yields
have dimmed the relative attraction
of Assura’s shares. The shares are
10 per cent higher than the forecast
NAV at the end of March next year,
but that’s down from a 20 per cent
premium this time last year and is
also cheaper than the 23 per cent
premium attached to Primary Health
Properties, its UK-listed peer.
Yet rising interest rates shouldn’t
present too much of a challenge to
financing costs. Issuing a
£300 million sustainability bond at
an impressive 1.62 per cent rate
brought down the overall average
cost of debt to only 2.3 per cent. All
drawn debt is at a fixed rate and iscarries two benefits: one, it provides
a kicker to index-linked rents, which
account for roughly 17 per cent of the
total; and, two, higher construction
costs translate into bigger rents on
open market reviews.
Rents were pushed 1.9 per cent
higher at review last year, up from
1.5 per cent the previous year, which
with acquisitions helped to increase
the net tangible asset value by just
over 6 per cent. A rising and reliable
income stream backs a generous
dividend, which analysts expect to
total 3.1p a share this year, meaning a
potential yield of 4.4 per cent at the
present share price.
Like other bond proxy stocks,D
rama is an unwelcome novelty
for investors in Assura, the
largest landlord to GP
surgeries in Britain, but full-year
results, help up by a week because of
auditor delays, beat analysts’
expectations on both earnings and
net asset value.
Of the £1.8 billion in contracted
rent, 82 per cent is paid or
reimbursed to tenants by the NHS
and the average length of leases is
almost 12 years. Higher inflationEmma Powell Tempus
Buy, sell or hold: today’s best share tipsRisks are high but so are the rewards
B
elievers in Scottish
Mortgage Investment Trust
need to maintain their faith
more than most right now.
The wind has turned
against the FTSE 100 constituent,
precipitating a share price fall far
greater in magnitude than those at
the start of 2020 or during the 2008
financial crisis.
A regulatory clampdown on
Chinese technology companies and
the prospect of more aggressive
interest rate rises by the US Federal
Reserve have caused a sell-off in the
growth stocks that make up the
trust’s largest holdings. Its net asset
value shrank by 14 per cent over the
12 months to the end of March, a
dramatic reversal from the 111 per
cent expansion in the previous year.
Indeed, the shares have fallen
further than the value of the trust’s
holdings, which means a rare
discount has opened up since the
start of this year, now at almost
11 per cent. The question today is
whether investors have the appetite
to withstand a further decline in the
share price in the immediate term, in
the hope of a revival of the returns it
has delivered in the past.
Scottish Mortgage, Baillie Gifford’s
best-known investment trust, has
made its name as an early backer of
companies that it reckons have high
growth potential, including an initialstake in Amazon in 2004 and Tesla
in 2013. Such bets take time to be
proved right, or indeed wrong, which
means that even the fund’s own
managers discourage those that
aren’t willing to park their cash for at
least five years from buying in. Long-
term investing “requires the ability to
endure periods of intense
discomfort”, Lawrence Burns, deputy
manager, has told investors. He andTom Slater, the fund’s lead manager,
stepped up to run it when James
Anderson left in April after 22 years
with the trust.
Rising rates will continue to make
re-rating difficult for American
technology stocks such as Amazon
and Tesla. The belief that tighter
regulation would prove more of a
blow to such companies in the West
than in the East has proved a costly
bet. Chinese groups including
Alibaba, the ecommerce giant, and
Meituan, the food delivery company,
sapped the most juice out of the fund
after suffering falls in value of more
than 40 per cent in the year to
March.
Underestimating the pace and
scale of regulatory change that couldA test of nerve
Share priceSource: RefinitivTop ten holdingsModernaASMLIlluminaTeslaTencentMeituanNVIDIAAmazonAlibabaKering6.5%6.4%6.3%6.2%4.9%3%2.7%2.6%2.6%2.4%
% of assets£1614121086
Jul Oct Jan Apr2021 2022occur in China and cutting holdings
in western technology stocks over
their Chinese counterparts was a
mistake, the managers have
conceded, but that is not an
indication of any intention to reduce
Chinese exposure. Will the fund be
bitten twice, or more? That depends
on whether you believe that the
worst of the regulatory crackdown is
behind us; the threat of US sanctions
is already accounted for in much-
reduced stock valuations, and
structural growth areas such as
ecommerce don’t reverse.
Historically low interest rates and
a flood of easy money hitting the
markets after the 2008 financial
crisis created perfect conditions for
growth stocks to flourish, as
investors headed for riskier assets in
search of a decent return. But it is
not a rising tide that has lifted the
fund’s return alone. Even after the
27 per cent decline in net asset value
over the year to April, the trust has
delivered a return of 565 per cent
over the past decade and almost
80 per cent over the past three years,
more than twice that generated by
the benchmark FTSE All World
Index, which includes some of the
largest technology companies, also
beneficiaries of ultra-loose monetary
policy. That could comfort investors
questioning whether the stellar
returns before this year were more a
result of luck than stockpicking skill.
The risk associated with backing
Scottish Mortgage is higher, but so,
too, are the potential compound
returns on offer for those who can
hold their nerve long enough.ADVICE Buy
WHY A good returns record
and discount attached to the
shares versus NAV accounts
for likely short-term volatilitynot due to mature for an average
eight years. That leaves a £125 million
revolving credit facility, which it may
draw on this year, but it also has
£244 million in cash and potential
proceeds from assets held for sale to
fund developments.
Capital growth won’t wow, but the
shares offer secure and rising
income.ADVICE Buy
WHY The shares should
deliver reliable income at a
cheaper pricescottish mortgage
investment trustMarket cap
£10.6 billionNet asset value
£10.22assuraDividend yield
4.3 per centNet asset value
60.7p