For the third week in a row, the number of investment trusts trading at 52-week high discounts stands at six, but there are a couple of new names that make it onto the list.

By
Frank Buhagiar
08 Jul, 2024

Doceo

We estimate there to be six investment companies trading at 12-month high discounts over the course of the week ended Friday 05 July 2024 – no change from the previous week.

For the third week in a row the number of investment companies trading at 52-week high discounts to net assets stands at six. Still, that’s very much at the lower end of what’s been seen year to date.

Among the new names on the Discount Watch – Regional REIT (RGL), the shares of which hit a year-high discount of -80% to net assets. That’s pretty much in line with the -82% discount at which the 10p price set for the fully underwritten £110.5 million fund raise stands at compared to net assets. A case of the market getting into line with the fund raise.

abrdn Diversified Income and Growth (ADIG), another new entrant to the list. The fund is in the process of winding itself up and is due to return £115 million or 38p per share to shareholders via the issue of B shares. The shares went ex on 3 July, meaning those who bought the shares after then would not be eligible to receive the B shares. Share price subsequently shed 38p to 44p. The company also announced that its latest net asset value stood at 69p a share as at Friday 5 July. Once again, that’s 38p lower than the 107p NAV announced on 3 July. All eyes now turn to future returns of capital.

Quick word on Downing Strategic Micro-cap (DSM), which appears on the list for a second week in a row. Last time round, DSM’s year-high discount was reported as -69.40%. This was put down to the shares going ex a 17.5p special dividend on 27 June. Shares subsequently dropped to 8.5p. However, the net asset value of 27.78p that was reported on 27 June did not take into account the special dividend. Hence the -69.40% discount. Net asset value was adjusted the next day to 10.28p leaving the shares trading at a -17.5% discount. 2 July NAV however was reported at 11.65p and with the share price at 8p this equates to the -31.3% discount reported here. Last week’s -69.4% discount, an anomaly, one that was down to timing it seems.

The top-five discounters

Fund Discount Sector

Regional REIT RGL -80.03% Property

Ground Rents Income GRIO -70.60% Property

Ceiba Investments CBA -69.64% Property

abrdn Diversified Income & Growth ADIG -35.01% Flexible

Downing Strategic Microcap DSM -31.31% UK Smaller Companies

The full list

abrdn Diversified Income & Growth ADIG

Regional REIT RGL

Ceiba Investments CBA

Ground Rents Income GRIO

Aquila European Renewables AERI

Downing Strategic Micro-cap DSM