Interim Management Statement

RNS Number : 6571C

New City High Yield Fund Limited

17 November 2009

 



To:          RNS

Date:      17 November 2009

From:     New City High Yield Fund Limited

 

Interim Management Statement 

 

For the Three Month Period from 1 July 2009 to 30 September 2009

 

Investment Objective

 

The investment objective of the Company is to provide investors with a high dividend yield and the potential for capital growth by investing mainly in high yielding fixed interest securities. 

 

Performance Summary

 

Total Return	For the three month period ended 30 September 2009
Net asset value per share	+19.7%
Ordinary share price	+15.9%

 

Capital Values	As at  30 September  2009	As at  30 June  2009	% Change
Net assets	£76.1 million	£65.1 million
Net asset value per share	49.61p	42.45p	+16.9%
Share price	51.25p	45.25p	+13.3%
Premium	3.3%	6.6%
Gearing (100 = nil geared position) *	107	112

 

* Gearing = Total assets ÷ Equity Shareholders' Funds

 

Review for the Period:

The three months to the end of September were very positive with a NAV total return of 19.7% and a share price total return of 15.9%. When combined with paying the increased 4^th interim dividend of 1.1p, overall this was an excellent result.

 

The Company took advantage of buoyant markets to sell out of its holding in Ineos Vinyls Finance 9¹/₈% 2011 which had had a spectacular recovery from the very distressed levels of late March and early April. Also in the period, the IFCO Systems NV 10³/₈% 2010 was called at par, and the Company also sold the Lloyds 6.25% 2014, which was issued as exchange property for the Clerical Medical Finance 4¼%. Monies from these bonds were reinvested into F&C Asset Management Plc 6¾% 2026, Lloyds TSB 13% Perpetual and Peel Holdings 9⁷/₈% 1^st Mortgage Debenture 2011. Later in the period the Company added to positions in the Canadian listed US copper producer Mercator Minerals 11½% Bonds 2012. We also increased our exposure to the insurance sector initiating positions in Aviva, Brit Insurance, Prudential and Royal London bonds.

  The rally in Credit Markets has been spectacular, and new issues abounded across most sectors, with companies and investment bankers making the most of the funding opportunities. We still feel that this could be a bubble caused by "Quantative Easing", but see it running at least until the start of 2010. The major issue facing the Global Market is the question of deflation versus inflation. Some inflation is good for the global economy and, most importantly, the Banking sector, where asset price inflation is already having a positive effect, and if continued, then this will help repair the Banks' balance sheets.  The dark cloud to this silver lining is the negative effect on the Global economy and the UK in particular.

We continue to seek out high yielding investments with good cash flow and ongoing ability to pay coupons. 

 

 

Dividend:

A fourth interim dividend for the year to 30 June 2009 of 1.10p per share was paid on 28 August 2009 to shareholders on the register on 31 July 2009.

 

 

Top Ten Holdings as at 30 September 2009

Company	Sector	Percentage of total assets
Balfour Beatty 10.75% CCP	Construction	6.5
Antares Energy CV 10% 31/10/13	Oil & Gas	4.9
REA Finance 9.5% 31/12/17	Food products	4.4
First Hydro Finance 9% 31/7/21	Financial	3.5
Cable & Wireless 8.625% 25/03/19	Telecom	3.4
Tullett Prebon 7.04% 06/07/16	Financial	3.0
FMG Finance 9.75% 01/09/13	Mining	2.9
Myer Group Finance 10.19% 15/03/13	Retail	2.8
Alliance Pharma 8% CV 31/12/13	Pharmaceuticals	2.6
Care First Group 11.8% 30/06/14	Healthcare	2.3
Total		36.3

 

 

Analysis of Investments by Currency as at 30 September 2009

	Percentage of total investments
Sterling	53
Euro	15
Australian Dollar	13
US Dollar	7
Norwegian Krone	6
Canadian Dollar	6
Total	100

 

  

Analysis of Investments by Asset Class as at 30 September 2009

	Percentage of total investments
Bonds	67
Convertibles	23
Preference shares	8
Equities	2
Total	100

 

 

Analysis of Investments by Quotation as at 30 September 2009

	Percentage of total investments
Listed/Quoted on a recognised investment exchange	89
Unquoted (convertible into a security quoted on a recognised exchange)	7
Unquoted	4
Total	100

 

Significant Events or Transactions since 30 September 2009

A first interim dividend for the year to 30 June 2010 of 0.85p per share was declared on 20 October 2009. This dividend is payable to shareholders on the register on 30 October 2009 and will be paid on 27 November 2009.

The Board is not aware of any other significant events or transactions which have occurred since 30 September 2009 and the date of publication of this statement which would have a material impact on the financial position of the Company.

 

Daily and Key Information

Further information regarding the Company including the share price and the recent monthly fact sheet, can be found at the Investment Manager's website www.ncim.co.uk 

 

Disclaimer

This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

 

For further information please contact:

Richard Lockwood or Ian Francis, New City Investment Managers Limited

020 7201 6900

 

 

END

 

 

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