City Of London Investment Share Discussion Threads

[skinny] 14/9/2015 08:47

Canaccord Genuity Buy 335.00 369.00 400.00 Retains

[masurenguy] 14/9/2015 07:31

It is also worth highlighting the strength of their balance sheet.

The Group's financial position remains strong with no borrowings and net assets of £13.7m (2014: £13.9m), excluding the non-controlling interest, the major part of that being cash of £10.2m (2014: £10.2m). Net cash generated from operating activities was £7.0m (2014: £3.7m), illustrating that there are relatively few significant timing differences that would cause cash flow to deviate materially from profits. As noted earlier, the Group spent £6.0m (2014: £6.0m) on dividend payments and a net £1.0m (2014: nil) on share transactions. The Group operates defined contribution pension schemes covering the majority of its employees. The costs of the pension schemes are charged to the income statement as incurred. Any amounts unpaid at the end of the period are reflected in other creditors.

Also worth noting that Barry Olliff has reconfirmed his own target share disposal prices in the run up to his projected retirement in 5 years time.

"I have always sought to align my interests with those of the Group's shareholders, both before and subsequent to the public listing in 2006. The consequence of this is that, as the largest shareholder and the Chief Executive of CLIG, close to all of my investible wealth remains in CLIG shares and I believe it is appropriate and prudent, for both the Company and me personally, that I gradually reduce my holding prior to my retirement in 2020. Accordingly, I propose: Selling 500,000 at £4.00 and 500,000 at £4.50. These intentions are the same as were communicated to shareholders, and specifically subsequent to my previous sale of 500,000 shares at £3.50 earlier this year."

[skinny] 14/9/2015 07:11

SUMMARY

•Funds under management (FuM) at 30th June 2015 were US$4.2 billion (2014: US$3.9 billion), an increase of 8%. In sterling terms, FuM increased by 17% to £2.7 billion (2014: £2.3 billion) as a result of the cross rate moving from1.71 to 1.57 over the period. The MSCI Emerging Markets TR Net Index fell 5% over the same period.

•Revenues, representing the Group's management charges on FuM, were £25.4 million (2014: £24.2 million). Profit before tax was £8.9 million (2014: £7.4 million).

•Basic earnings per share were 26.4p (2014: 21.1p) after a tax charge of 26% (2014: 28%) of pre-tax profits.

•A maintained final dividend of 16p per share is recommended, payable on 30th October 2015 to shareholders on the register on 9th October 2015, making a total for the year of 24p (2014: 24p).

•Opened new office in Seattle, May 2015.

[cockerhoop] 08/9/2015 09:48

8th October

[brancho] 08/9/2015 09:48

8 Oct 2015

[casino444] 08/9/2015 09:44

When's the ex div date , anyone know , thanks

[cockerhoop] 04/9/2015 10:30

Maynard,

I reckon it's at $3.6bn down from $3.95bn at the end of July. Since it's recent peak ($4.4bn at end of April) FUM are down approx 18% compared to about 24% in it's benchmark index. Agree that with no recovery in Emerging Markets (or significant new investment mandates) EPS will struggle to meet current forecasts.

[tmfmayn] 04/9/2015 08:37

hxxp://citlon.co.uk/shareholders/announcements.php

end of Aug FUM down to $3.6 or $3.5bn.

using the FUM/profit table in annual report, I reckon such FUM translates into an EPS run-rate of about 20p were there to be no recovery.

[robsy2] 02/9/2015 09:01

Looks interesting but the spread has put me off. 23p spread does away with one of my reasons for buying the stock , the 16p divi at the end of next month. Good reason to hold though if you are already in.
R2

[masurenguy] 31/8/2015 09:57

Fund managers eye emerging markets after crash

Fund managers see value in emerging markets as beaten-up currencies throw up 'once in a decade' opportunity after Black Monday.

Fund managers are seeing increasing signs of value in embattled emerging markets, which were hit hard in the Black Monday stock market crash. Many emerging markets mounted a strong recovery from last Monday's tumble, with the MSCI Emerging Markets index up 2% over the week to Thursday.

While emerging markets stand to be worst affected by China's slowing economic growth and stock market volatility, they rallied strongly after the world's second largest economy cut interest rates and on hints that the US Federal Reserve may delay an interest rate hike expected next month. John Chatfeild-Roberts, manager of Jupiter's Merlin range of fund-of-funds, said that value was 'now starting to appear' in the developing world. He currently holds only a minimal exposure to emerging markets in his funds. ‘Once the dust has settled, the main impact for investors will be on holdings in emerging markets, where value seems to be now starting to appear, and commodities,’ he said. ‘Overall, the bull market in shares is getting long in the tooth but quantitative easing is still a major factor for markets in Europe, the US and Japan and will remain so while concerns at central banks about the debt burden remain. Policy makers are also likely to defer planned rises in interest rates.’

Michael Hasenstab, who runs a range of bond funds for Franklin Templeton, argued that the downturn in global markets that culminated in Black Monday's crash had presented 'once in a decade' opportunities in beaten-up emerging market currencies. ‘The new opportunity that has come about over, really, the past month is one of those once a decade opportunities where you’ve seen in places like the Mexican peso, the Malaysian ringgit, the Korean won, the Indonesian rupiah, the Brazilian real, a number of key emerging markets currencies have tested at all-time lows,’ he said. ‘In Asia, many of the currencies are approaching or are at the levels that we didn’t see since the Asian financial crisis, when Asia was the source of the crisis. Today fundamentals are very different than they were back in the late ’90s that caused that crisis,' he added. ‘In fact, most countries have significantly higher reserves from large current account surpluses, growth is on much stronger footing than it was back in that period where there was an investment bubble, and huge macro imbalances that led to a collapse. We’re seeing tremendous value in that region.'

Despite some near-term growth stumbles, Asia’s prospective growth rates are still three times that of developed economies: 6% versus 2%, according to Goldman Sachs estimates,' he said. ‘When Asia has traded in the valuation range of 0.9 to 1.4 times book value (current level is 1.3 times book value, Citigroup data shows), then the probability of a positive return on a 12-month and 36-month view is greater than 80%.’

[speedsgh] 28/8/2015 13:22

Yes, I thought the letter was very good. Straight forward, no nonsense + to the point.

[skinny] 28/8/2015 12:57

No holds barred!

[speedsgh] 28/8/2015 12:33

Seems like CLIG aren't very happy with the way one of the investment companies that have invested in is being run...

Text of letter to icapital.biz Berhad -

[masurenguy] 25/8/2015 16:51

Hi Mayn, I would assume that the 5 year average starts from the beginning of the last fiscal year which commenced in July 2014. However they have demonstrated considerable flexibility in the past when they maintained an unchanged dividend when the cover was based upon 1.5 x eps and have already indicated a continuation of this by maintaining it at 16p (FY 24p) for the year just ended when it would have been 14p (22p) if the 1.1 x cover had been strictly applied.

[effortless cool] 25/8/2015 14:57

I closed all of my other shorts yesterday but left this one running. I expect FUM to come under continued pressure in this much more risk averse environment.

With regard to TMFMayn's question, I would have thought the 1.2 would be applied to five years on a prospective basis, i.e. the current year would always be the first year.

[tmfmayn] 25/8/2015 12:00

Hi masurenguy,

"They have subsequently announced a further reduction in this cover in last months year end trading update "the Board's dividend policy is based around a cover of 1.2 times earnings on a rolling five year average."

Throwing this out for discussion. The 5-year average, does it start from when the policy was declared (i.e. 2014 onwards)... or does it start further back?

You see, div cover for last 3 years has been 1.1, 0.9 and 1.0, and if we get say 1.0 for 2016, we need div cover of 2.0 for 2017 to get to an 1.2 average. Div cover of 2.0 of course requires big EPS jump or div cut.

Anyway, I assume (or hope!) the 5-year average starts from when the policy was declared last year and as you say, there is leeway with the cash reserves. EPS should improve anyway with the marketing costs running off.

Even so, if FUM stays at $4bn, 5-year cover may become tight. Cover was 1.0 in 2015, and say 1.0 for 2016 -- we still need 1.33 cover (i.e. 32p EPS) for 2017, 2018 and 2019 for a 1.2 average.

[skinny] 25/8/2015 07:23

The Board confirms the final dividend timetable for the year to 30th June 2015:

· ex-dividend date 8th October 2015
· dividend record date 9th October 2015
· payable on 30th October 2015

As previously announced, the final dividend of 16p per share in cash, is subject to shareholder approval at the AGM on 19th October 2015.

[masurenguy] 20/8/2015 11:55

You're a brave man to short CLIG with the usual large spread and the upcoming dividend, as already pointed out in post #1576 above.

Furthermore, the Chinese Yuan has stabilised over the past week and there is an interesting article in the Daily Telegraph from Ambrose Evans-Pritchard quoting a Nomura analyst who points out that "China has $3.65 trillion reserves to cover foreign currency debts of $1.135 trillion, a ratio of 322pc. This a far cry from the East Asia Crisis in 1997-1998 when the ratio was 59pc in Malaysia, 33pc in Thailand, 27pc in Indonesia, and 22pc in Korea. All these countries had current account deficits. China most emphatically does not. "We think the authorities will remain in control of the situation. This may mean that the worst shock effect is behind us, although ultimately the economic data will provide the final verdict," he said."

China's August scare is a false alarm as fiscal crunch fades
The recession in China has been and gone. The housing market is picking up as stimulus revives, putting off the day reckoning again


Still, its contrarian views that make a market!

[effortless cool] 20/8/2015 10:52

mrf,

The spread was awful - 18p, but at least I caught that strange surge up this morning.

Don't expect to make my fortune here - looking for 320p.

[my retirement fund] 20/8/2015 10:46

I bet the spread was awful to do that, what was it?

Dont forget if your holding still come October you'll have to also stump up a further 16 pence per share short to pay your dividend dues.

[effortless cool] 20/8/2015 10:39

I have gone short CLIG this morning. Downside risk to FUM from emerging markets turmoil is significant, with upside triggers unclear and more remote.

[masurenguy] 20/8/2015 09:35

TMFMayn - 1571: The tip in the Chronic last week may have lent support. Plus divi remains attractive, if just about covered if FUM stays at $4bn.

Hi Mayn - the dividend is an important price support factor in my view too especially since they have been prepared to subsidise it out of reserves over the past few years when profits were below their previous cover formula of 1.5 x earnings. They even maintained a dividend of 24p in the year ending June 2014 despite the eps having fallen to 20.6p in that year. They have subsequently announced a further reduction in this cover in last months year end trading update "the Board's dividend policy is based around a cover of 1.2 times earnings on a rolling five year average."

If FUM and profits were to slip back again due to a downturn in emerging markets then I think that one could be reasonably optimistic that they would continue to subsidise the dividend out of reserves unless there was a really significant decline with perhaps the eps falling below 20p as the potential threshold.

[irenekent] 20/8/2015 08:19

Been in for a number of years. Seems to be still recovering although as others have said it must be feeling the heat from the current EM problems. Don't forget it was over 460p in 2011.

[my retirement fund] 19/8/2015 16:35

I agree, its been supported by the IC tip, also the good yield. However FUM will certainly be suffering in the rout which is not good news at all.