Select Committee on Treasury Minutes of Evidence


Annex B (continued)

Murray Extra Return Investment Trust PLC

INSTITUTIONAL REPORT

August 2002

Performance Table

  
  
% Total
Return
% Total
Return
% Total
Return
% Total
Return
% Total
Return
% Total
Return
  
31-07-02
1
3
6
1
3
since
  
Value
month
months
months
year
years
launch
Share Price
Capital
2.3p
(50.00)
(55.0)
(70.0)
(83.8)
(89.3)
(86.7)
Income
55.0p
(14.1)
(18.5)
(28.2)
(39.8)
(37.6)
(25.3)
ZDP
102.0p
(16.7)
(20.9)
(23.9)
(20.8)
(8.7)
2.0
Benchmark
2,327.9
(8.8)
(16.1)
(10.4)
(12.1)
(2.2)
(25.1)
NAV
ZDP
134.2p
  
  
  
  
  
  
Income
38.0p
  
  
  
  
  
  
Yield*
12.7%
  
  
  
  
  
  
Premium*
44.7%
  
  
  
  
  
  
Share Premium: Lipper, total return, net income reinvested. Fund launched 01/09/98.
  
* Yield/Premium calculated from Income Share. Benchmark—FTSE 350 Higher Yield Index.
  
Source: Lipper, net income reinvested.






OBJECTIVE

  To achieve both capital appreciation and a high and growing income principally from a portfolio of UK equities.

MANAGER'S REPORT

  Following poor performance in June, the stockmarket continued in its downward trend in July posting a further negative total return of -10.4 per cent. Fears that US economic recovery was faltering, amidst concerns about poor accounting practices, hit investor confidence sharply.

  For the first time in a long while Telecom Services outperformed the markets, largely owing to continued rotational sector selling. Insurance stocks remained weak on fears of weak solvency ratios and mining stocks in particular fell sharply on fears of a future divestment of South African assets in support of Black Empowerment.

  There was litle change to the portfolio during the month. The weighting in banks was reduced via part sales of Barclays and Royal Bank of Scotland. Following the recent sharp falls in the market, some stocks are beginning to look attractive, however the continued volatility of the market suggests caution in the timing of purchases.




TRADING DETAILS
SEAQ pageMEXC.L (Cap), MEXi.L (inc), MEXz.I (ZDP)
Bloomberg/Reuters CodesMEXZ LN (ZDP), MEXI LN (inc), MEXC LN (Cap)
StockbrokerHSBC Investment Bank
Market MakersABN, CSCS, UBSW, DMG, HSBC
Internethttp://www.murray-extra.co.uk
http://www.aberdeen-asset.com
  
  
CALENDAR
Year end31 August
Dividend paidFebruary, May, August, November
Launch dateSeptember 1998
AGMNovember


Jersey Phoenix Trust Limited

INSTITUTIONAL REPORT

August 2002




Total Investments at 31 July 2002


Total Investments77

Source: Aberdeen Asset Managers Ltd.


Gearing at 31 July 2002


% £m

Gross Assets 56.2
GearingDebt 4.8
Factor1306.98Prior Charges 47.1

Source: Aberdeen Asset Managers Ltd.


OBJECTIVE

  Jersey Phoenix Trust Limited objective is to provide relatively high income with the opportunity for future growth of both income and capital over the planned life of the Company, and to provide Zero Dividend Preference shareholders with their fixed prior capital entitlement.

MANAGER'S REPORT

  Investor confidence deteriorated sharply over the month as economic clouds darkened. The US statisticians have made a fairly significant rewrite of history with the economy clearly in recession last year, with three-quarters of contracting output. US GDP growth for 2001 has been revised down from 1.1 per cent to 0.3 per cent. Moreover, recent survey evidence has raised the risks of a double-dip in the US. There has been a sharp fall in both the Michigan and Conference Board consumer confidence surveys. The weakness of durable goods orders calls into question the sustainability of the capex revival.

  Over the month the UK equity market held up better than most. Compared with the US example, in the UK there is a greater belief in the underlying integrity of the earnings base, while analysts' forecasts do not look particularly over-optimistic. Whilst the FTA All Share Index recorded a fall of 9.2 per cent, on a total return basis, foreign equities fell 10.8 per cent. Europe meanwhile was a notable weak spot plunging 15.7 per cent over the month.

  In the UK equity market the bank sector proved resilient, falling just 5 per cent, whereas the pharmaceutical sector was a big faller, down 13 per cent over the month.

  Such was the loss of confidence that the FTSE 100 fell to an intra-day low of 3625.9 on 24 July, versus a closing high for this year of 5323.8, recorded on 4 January.

  Long-dated gilts produced a return of 1.0 per cent for the month and 3.2 per cent year to date.





TRADING DETAILS
Bloomberg/Reuters CodeJPT LN
StockbrokerCazenove & Co + 44 (0) 20 7588 2828
Market MakersCAZN, ABN, CSFB, WDR
Internethttp://www.jersey-phoenix.co.uk
http://www.aberdeen-asset.com


The European Monthly Income Trust Limited

INSTITUTIONAL REPORT

August 2002




OBJECTIVE

  The Company aims to provide Annuity shareholders with a monthly income and a defined capital entitlement on 30 April 2010 (the Planned Winding-up Date) and to provide Ordinary shareholders with the potential for geared capital growth from a portfolio invested in a combination of shares in European fixed interest and other high yielding securities denominated in Euros or any other European currency.

MANAGER'S REPORT

  On 27 July 2002, the Company announced its Final Results for the year to 31 March 2002. The following is an extract from the Chairman's Statement:

    "Since my interim statement dated 15 November 2001, the markets have fallen substantially in both high yield, fixed interest and split capital investment trusts with a marked deterioration in European equities in July 2002. The Company's Ordinary share net asset value declined from 31.38p at 30 September 2001, to 20.67p at 31 March 2002, and has subsequently declined to 9.3p at 24 July 2002.

    On 14 January 2002, the Company repaid approximately Euro 105 million (£65 million) of the Company's debt. The Company has Euro 52.7 million outstanding debt and large cash balances, which are being utilised in order to off set the level of indebtedness for bank covenant compliance purposes. At 31 March 2002 and 24 July 2002, the approximate allocation of the Company's portfolio was as follows:


31/3/02
%
24/7/02
%

European Growth Equities
59.5
20.8
High Yield Bonds
25.5
25.1
Split Capital Investment Trusts
8.7
4.0
Cash
6.3
50.1

Total
100.0
100.0


    At the time of the January 2002 debt repayment the Board indicated that the associated costs had been added to the interest rate payments payable over the remainder of the life of the Company, chargeable in the same manner as other expenses as to 50 per cent to revenue account. The accounting impact of this is an additional charge of approximately £2.7 million to revenue account for the year ended 31 March 2002, that effectively prevents the Company from paying any dividends (on either class of share) until such time that the revenue reserves are restored to positive balances. Annuity shareholders are reminded that their entitlement to dividends is cumulative. Payment of their accumulated entitlement will be effected as soon as circumstances permit this.

    In the light of the Company's diminished capital base, the Directors are in the process of reviewing the total expenses of the Company and will update shareholders further with the Annual Report and Accounts. The Directors are also reviewing, with the Company's advisers, the most appropriate investment strategy in the light of recent market conditions and we will advise shareholders of the outcome of these deliberations as soon as discussions have been completed."

Total Investments at 31 July 2002


e
Total Investments
120

e
Source: Aberdeen Asset Managers Ltd.





PREVIOUS DIVIDEND ANNOUNCEMENTS

15 November 2002Suspension of Dividends—Ordinary shares
29 May 2002Suspension of Dividends—Annuity shares



CALENDAR
Year end31 March
Accounts publishedJune, November
Annual General MeetingJuly
Dividend paidN/A
Launch dateApril 2000
Wind-up date30 April 2010




 
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Prepared 17 October 2002