Share Name Share Symbol Market Type Share ISIN Share Description
Merchants Trust Plc LSE:MRCH London Ordinary Share GB0005800072 ORD 25P
  Price Change % Change Share Price Shares Traded Last Trade
  10.50 3.01% 359.00 165,301 16:35:15
Bid Price Offer Price High Price Low Price Open Price
355.50 359.00 359.00 347.50 348.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 36.24 32.67 29.67 12.1 424
Last Trade Time Trade Type Trade Size Trade Price Currency
16:35:15 UT 217 359.00 GBX

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Date Time Title Posts
10/8/202017:53MERCHANTS IT yld 6%819

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Merchants Daily Update: Merchants Trust Plc is listed in the Equity Investment Instruments sector of the London Stock Exchange with ticker MRCH. The last closing price for Merchants was 348.50p.
Merchants Trust Plc has a 4 week average price of 332.50p and a 12 week average price of 332.50p.
The 1 year high share price is 569p while the 1 year low share price is currently 293.50p.
There are currently 118,144,887 shares in issue and the average daily traded volume is 120,819 shares. The market capitalisation of Merchants Trust Plc is £424,140,144.33.
zac0_4: I think it's vitally important to regularly review performance of individual holdings. I haven't said that my strategy is simply to move away from income just because we're in a period of unprecedented uncertainty. However, a mainstay of any investment portfolio has to be capital preservation. If holdings cannot hold onto my capital when things get tough then I see little point in holding them. MRCH share price has to deliver 61% growth from here just to get back to it's year end figure! I'm sick and tired of having to play catch up with my income paying holdings. I've plenty of other holdings that have more than proved their resilience during this period.
mister md: thanks zac0_4 - I watched the video you mentioned (fast forwarded through some of it). Some interesting discussion, including the part about Chinese stocks (non)-ownership versus exposure to China. odd to see MRCH price down today with virtually all stocks up
chart trader2000: A conundrum if u bought 10k of MRCH yielding 8% u would receive income of £800 if the share price doubled and the dividend was unchanged yielding 4% u would receive income of £800 if u sold all your shares and re-invested in a share yielding 6% the income would be £1200 IF u could do that again your capital would be 40k, u would have protected your gain, u might even get the chance to buyback MRCH at a decent yield. the downside > the new share might fall and u would give back all or most of the gain but u would still receive £1200 as long as the dividend wasn't cut. of course if u hold on to MRCH it could also fall and take away your gain. When the market recovers yields of 6% plus for 'secure' dividends will disappear faster then snow on a summer's day. At 400p the projected yield will be 6.7%.
chart trader2000: In recent months, Gergel has sold positions that performed relatively well during the initial stock market sell-off such as Prudential and Sirius Real Estate, which has industrial property in Germany. The stock had appreciated due to a rising rental stream and higher profits, and moved to a premium to NAV. Given the outlook for the German industrial economy, the manager considered it prudent to sell the company, locking in significant gains. There is a new position in BT, which apart from a brief time around three years ago, has not been in MRCH’s portfolio for several years. The manager says that the company was challenged due to increased investment in fibre networks and higher competition in mobile phones. BT’s shares had been extremely weak, halving between mid-February and mid-March 2020, and were trading on a very low valuation. Gergel considers that the company’s business is relatively resilient. However, in the medium term returns from this stock are more likely to come from capital appreciation, as BT has suspended its final dividend for FY20 (ending 31 March) and its interim and final dividends for FY21, with payouts expected to resume in FY22 at 7.7p per share versus 15.4p per share in FY19. The manager highlights MRCH’s position in spread betting company IG Group, which is now a top 10 position. He says the firm is benefiting from new business opportunities; trading has been strong, and the company has increased earnings guidance twice in recent months. While IG’s shares have performed relatively well, they continue to offer an attractive c 6% dividend yield. Gaming company GVC is another of MRCH’s holdings that has suspended its dividend; however, Gergel is confident that its business will rebound, and, while betting shops have closed, its online business remains robust. While there is currently a lack of sports to bet on, the manager says that Premier League football and horse racing will resume. He adds that once betting shops reopen, it should be relatively easy to follow social-distancing rules. Gergel was able to add to the GVC position in March at levels more than 50% lower than its current share price. He has also added to the holding in furniture retailer DFS and participated in its recent rights issue. The manager says the company is a market leader and he expects it to emerge from the lockdown relatively stronger in both its online and its physical operations. Gergel believes that there is pent-up demand for new furniture, and notes that DFS’s competition tends to struggle with low profitability. MRCH’s largest subsector exposure is to tobacco, which the manager says is attractively valued. British American Tobacco has recently announced a very robust trading statement. Its new product areas have been slower to take off than originally thought, but this has not affected the company’s profitability as cigarette sales are holding up well. Tobacco companies are very cash generative; however, not unexpectedly, Imperial Brands has recently cut its dividend by a third to pay down debt. Despite this, its shares still offer an attractive above-market c 9% dividend yield. Edison
chart trader2000: Alternatives Equity income has become a dangerous place to invest on a total return basis. Looking at the investment association’s open-ended sectors (to eliminate the effect caused by some closed-ended funds paying income out of capital), both UK and global equity income funds have underperformed their growth sector averages over five years; and in the case of the UK over ten years too. The dynamics behind this trend don’t seem to be changing, and the current crisis may entrench them further. Equity income funds are pushed into some traditional ‘value’ sectors in order to generate a higher yield than the market. Notably these include energy, materials and banks. The energy sector is under attack from environmental interests, which have influenced the policy goals of lawmakers in the UK and further afield. For example, the UK’s commitment to a net zero carbon economy by 2040 implies structural leakage of oil use. Materials suffer from some similar concerns, although there is the potential for a shift between materials, rather than away from them. In the case of banks – in my view – they are increasingly becoming like utilities, with the post-crisis world likely to see increasing regulatory interference in their lending policies. Structurally low inflation is here to stay too, given the effects of the world’s ageing demographics, which is poor for bank profits. So, to my mind, the real risks are in equity income, while alternatives look relatively attractive. Trusts in the conventional and renewables infrastructure sectors have the wind behind them, in contrast to stale large-cap value stocks. Renewable infrastructure trusts like Greencoat UK Wind (UKW) are beneficiaries of government policies on climate change, with a greater supply of potential investments and greater demand for private capital in the sector (although falling subsidies will have to be navigated over the coming years). I think conventional infrastructure funds such as HICL should also (indirectly) be supported by government policy in the coming years. Even prior to the coronavirus pandemic, the UK government was promising substantial investment in the country’s physical infrastructure as a part of its ‘levelling up’ programme. While HICL does have some demand-based assets (such as toll roads), which will suffer in the immediate aftermath of the coronavirus crisis, the vast majority of its portfolio is invested in PPP assets, where it does not expect to see any material valuation impact. Overall the portfolio should generate a defensive revenue stream over the medium term, with less likelihood of risks to the payout than an equity income fund, in my view. I accept that there is uncertainty over the valuations at the current time. But I think some alternatives are well established enough for us to make assumptions about valuations which are just as reasonable as those we make for equities. Another interesting option in this space could prove to be JPMorgan Global Core Real Assets (JARA). The share price took a real hit during the recent crisis, perhaps due to the trust’s planned exposure to transport and real estate, and remains around 11% down. However when fully invested (it is still 65% in cash) and once the lockdowns are eased, JARA’s diverse portfolio of real assets should generate steady dividends over the course of the cycle. It should also be able to take advantage of the recent falls in assets to buy in at better prices. I also think investors need to look through share price moves in this crisis. While correlations in share prices might have spiked in the initial panic, I think NAVs are likely to continue to be relatively uncorrelated to global equities in all three cases discussed. If, as an investor, you can avoid selling at the worst possible point, then your return as a shareholder could be more consistent with the more stable value of the real assets invested in by these alternative funds – and their relatively protected cash flows. Finally I think another dynamic of the past ten years is likely to be compounded in the post-SARS-COV-2 world. With the weaknesses of the business models of the oil companies, banks and miners – and the likelihood of another period of weak growth, as the economy returns to full speed via gradual easings of the lockdowns – the rush for growth is likely to become more pronounced. Yields on equities without structural headwinds will become further compressed, therefore pushing investors further into structurally challenged sectors which are less likely to provide growth alongside yield. Kepler
tim 3: Some quality posters on here as always. I think many and I include myself in this bought mrch for income thinking that although the share will go up and down if they maintain their long record of increasing dividends the month to month movement of the share price is less important because you still get that payment and in the longer term the share price has always come back to make new highs. Of course total return is the most important thing but for income seekers this principle kind of works and is quite easy to get your head round.
chart trader2000: How to benefit from the longest bull run ever and cope with share price volatility CONTRIBUTOR IAN COWIE Is there still time to join the longest bull run - or period of rising share prices - on record? While many bank and building society deposits fail to keep pace with inflation (Which? Best savings rates of 2019 26.04.19), the average conventional investment trust delivered share price returns of 7% over the last year (Morningstar via Association of Investment Companies). The past is not necessarily a guide to the future and share prices can fall without warning. However, the history of the last century and more shows that anyone who could remain invested in shares for five consecutive years at any time since 1899 had a three-in-four historical probability of receiving greater rewards than cash depositors (Barclays Equity Gilt Study 2019). More recently, since share prices began to recover from the global credit crisis in 2009, medium to long-term investors received share price returns of 82% over the last five years and an eye-stretching 330% over the last decade, according to the Association of Investment Companies (May 6 2019). While the future remains unknowable, investment trusts such as JPMorgan Claverhouse Investment Trust plc can be proud of their record of raising dividends every year for 46 years (AIC 12.03.19). HOW SHARE PRICE VOLATILITY CAN HELP Many stock markets fell sharply during the global credit crisis but have bounced back strongly since then. Did you get your share of that recovery? For example, the Standard & Poor’s 500 index - a broad measure of the American market, the largest in the world - reached a low-point of 677 in March, 2009, since when it has quadrupled (Yahoo! Finance S&P 500 long term chart 06.05.19). During the same period, the FTSE 100 index of Britain’s biggest shares has more than doubled from a low-point of 3,542. Decisive action by governments around the developed world, including cutting interest rates and keeping them lower for longer than many observers expected, reduced returns to depositors in bank and building society accounts but helped to increase returns to stock market investors. WHAT MIGHT HAPPEN NEXT? The past is not necessarily a guide to the future and share prices can fall without warning. In addition to economic factors, such as changes in gross domestic product (GDP) - a measure of national output - or interest rates, stock market valuations can be affected by human emotions. For example, fear and greed, pessimism and optimism, can drive share prices down or up. Technological developments - such as inventions and improvements in efficiency - tend to make the economy grow over time. But investors’ optimism or pessimism about the future may fluctuate in a cyclical fashion, varying between pessimism when confidence and share prices are low to optimism when confidence and share prices are high. But historical evidence suggests it pays to avoid short-term emotion to gain from medium to long-term economic growth. WHY IT PAYS TO TAKE A MEDIUM TO LONG-TERM VIEW One of the most comprehensive analyses of various assets, or ways of storing wealth and making it grow over time, examined returns from shares reflecting the changing composition of the London Stock Exchange and cash deposits since 1899 (Barclays Equity Gilt Study page 101, figure 8). If shares were held for two consecutive years, there was a 69% probability of them delivering a higher return than cash. So, over any two-year period, there was a better than two-in-three chance that shares would beat deposits. Put another way, there was nearly a one-in-three chance that cash might do better than shares. However, if shares were held for five consecutive years, the risk that stock markets might be temporarily depressed was reduced and the historic probability of shareholders receiving higher returns than depositors increased to 76% - or better than one-in-four. That is why it is sometimes said that five years is the minimum period over which stock market investment should be considered. Over 10 consecutive years, the historic probability that shares would do best increased to 91% (Barclays Capital Equity Gilt Study 2019 pg. 101). HOW INVESTMENT TRUSTS MINIMISE RISK AND MAXIMISE REWARDS Investment trusts are one of the oldest forms of pooled fund, bringing many individual investors’ money together to share the cost of professional management and invest in dozens of different companies and - in the case of international funds - different countries. The aim is to diminish the risk inherent in stock markets by diversification. Since 1868, investment trusts traded on the London Stock Exchange have enabled investors of all sizes to gain exposure to income and growth opportunities in Britain and overseas. More recently, since share prices began to recover from the global credit crisis in 2009, medium to long-term investors received share price returns of 82% over the last five years and 330% over the last decade, according to the Association of Investment Companies (06.05.19). RISING INCOME AND CAPITAL GROWTH While the future remains unknowable, investment trusts such as JPMorgan Claverhouse Investment Trust plc can be proud of their record of raising dividends every year for 46 years. That means this fund - which aims to provide a combination of capital and income growth, mostly from companies listed on the London Stock Exchange - succeeded in increasing dividend distributions throughout a period spanning several wars and stock market crashes. Over the last five years, JPMorgan Claverhouse Investment Trust plc has increased its dividend from 20p per share in 2014 to 27.5p in 2018 (Association of Investment Companies, 06.05.19) and its yield - or the income it pays expressed as a percentage of its share price - is currently 4%. Dividends are distributed to this investment trust’s shareholders four times a year - in March, June, September and December. Meanwhile, JPMorgan Claverhouse Investment Trust’s total share price return was 41% over the last five years and 216% over the last 10 years (Barclays Equity Gilt Study 2019 06.05.19). Alternatively, JPMorgan Global Growth & Income plc enables shareholders to benefit from the best ideas from around the world with a predictable quarterly income. JPMorgan Global Growth & Income plc yields 3.9% and delivered total returns of 101% over the last five years and 297% over the last decade. WHY TIME IN THE MARKET MIGHT BEAT TIMING THE MARKET Share prices are volatile and it is impossible to predict with certainty whether they will rise or fall in the short-term. As discussed earlier, investor sentiment may fluctuate between fear and greed, driving prices down or up. Sometimes the best days for rising share prices follow soon after share prices have fallen, so short-term speculators who duck in and out of the market run the risk of missing some of its potential returns. For example, someone who invested £1,000 in the FTSE All Share index 30 years ago could have enjoyed an annualised return of 8.7% and a final fund value of £12,146 if they had stayed in the market the whole time (Fidelity International 06.05.19). By contrast, if this investor missed just the best 10 days in the market during the last three decades, he or she would have received an annualised return of 6.4% and ended up with a total fund value of £6,496 – that’s a difference of £5,650. If this investor had missed the best 30 days - equivalent to an average of missing just one day per year during this period - then their annualised return would have plunged to 3.6%, reducing their final fund value to £2,927. That is why it is sometimes said that time in the market is more likely to build wealth than attempting to time the market. Many stock markets have recovered strongly since the global credit crisis more than a decade ago to create the longest bull run - or period of rising share prices - on record. Stock market investors have benefited from low interest rates, while these reduced returns to bank and building society depositors. But share prices are volatile and can fall without warning. Investment trusts diminish the risk of stock market investment by diversification and sharing the cost of professional fund management. Investing over the medium to long term - that is, over five years or more - is least likely to be affected by short-term volatility and most likely to produce satisfactory results. Ducking in and out of shares may mean you miss some of their potential returns. Time in the market is a safer path to wealth creation than trying to time the market. Investors should remember that share prices can fall without warning and that you may get back less than you invest. However, investment trusts seek to diminish the risk inherent in stock markets by diversification and professional fund management. There are hundreds of investment trusts to choose from. For more details see the Association of Investment Companies.
chart trader2000: The emotional benefits of dividend re-investment I really like this style of investing and use it myself for my share portfolio. What's particularly good about it is that you focus your attentions on the performance of the company and its ability to keep paying a growing dividend rather than what's happening to the share price. The bigger the amount of your investment return that comes from dividends and their reinvestment, the less you tend to worry about share prices. In fact, with this investment strategy you can actually welcome falling share prices. As long as the underlying business is sound, a falling share price allows your dividend to buy more new shares which means more dividends to potentially boost your long term returns. With this mindset, you worry less and concentrate on what's important rather than the short-term whims of the stock market. To me this is proper investing and more people would be better off financially and emotionally if they put their money to work this way. Buy and hold is not the same as buy and forget This strategy is based on holding on to a share for a long period of time. This is known as a buy and hold strategy. However, this must not be confused with a buy and forget strategy. Whilst you do hear stories of people who had left shares invested and forgotten about them for 30 years, and then to find out they had become millionaires, it is probably wiser to keep an eye on your investment from time to time. I;m not talking about obsessing about share prices every day. Instead you should read the company's half year and full year results statements to see that all is well and that your dividend is still safe and growing. The other thing to keep an eye on from time to time is the dividend yield on your shares. This is important because it represents the rate of interest you are getting on your reinvested dividends. What you need to be constantly asking yourself is whether you can reinvest at a higher rate elsewhere? Edited article from Sharescope. ............. too boring getting rich slow for the many, not the few, where I have heard that before ? u will get many desperate days but u will also get some days like the last few and hopefully a few more.
chart trader2000: Edison issues review on The Merchants Trust (MRCH) The Merchants Trust (MRCH) offers investors the potential for long-term capital growth along with a high and growing level of income. Helped by the refinancing of the trust's high-cost, long-term debt, for FY20 (ending 31 January) the board's intention is that MRCH's annual dividend will be at least 4.2% higher year-on-year. Manager Simon Gergel at Allianz Global Investors (AllianzGI) is optimistic about the trust's prospects, citing a broad opportunity set due to attractive valuations in the UK stock market. He says that at some stage the deeply depressed sentiment towards UK shares should improve, which could lead to a meaningful revaluation of the domestic market. Despite Brexit uncertainty, MRCH has re-rated from a c 6% discount and now regularly trades close to NAV. The current 0.1% share price discount to cum-income NAV compares with the average 0.4%, 3.7%, 3.7% and 2.2% discounts over the last one, three, five and 10 years respectively. MRCH has a progressive dividend policy and offers an above-market 5.4% yield. The Merchants Trust High and growing level of income The Merchants Trust (MRCH) offers investors the potential for long-term capital growth along with a high and growing level of income. Helped by the refinancing of the trust’s high-cost, long-term debt, for FY20 (ending 31 January) the board’s intention is that MRCH’s annual dividend will be at least 4.2% higher year-on-year. Manager Simon Gergel at Allianz Global Investors (AllianzGI) is optimistic about the trust’s prospects, citing a broad opportunity set due to attractive valuations in the UK stock market. He says that at some stage the deeply depressed sentiment towards UK shares should improve, which could lead to a meaningful revaluation of the domestic market. Edison issues review on The Merchants Trust (MRCH) Click here to view the full report. All reports published by Edison are available to download free of charge from its website HTTP:// ............. marketing doc from Edison.
goldpiguk: Hi andyj, Interesting point about the MRCH share price. The time period you refer to includes the dotcom crash, the banking crisis as well as the current Brexit effect, which has put some foreign investors off investing in the UK entirely. The MRCH share price has been quite volatile over this time period. At some points during 1998 MRCH shares could have been picked up for around £3.00 a share. The 1998 highs were around the current share price. However it should be noted that since 1998 MRCH has paid out over £3.84 in dividends and is primarily an income investment trust. The UK FTSE 100 where MRCH has substantial holdings has performed poorly over this time period. The intraday high of 6,950.6 set on 30th December 1999 and the closing high that day of 6,949.63 were not exceeded until 2015. For an ISA I think investment trusts (I currently hold three) offer well balanced underlying holdings with a higher degree of income protection than holdings in single companies. In the next few months I expect the UK market to remain very volatile and there is a risk of steep falls especially if we cannot get a satisfactory resolution to the Brexit issue. If the Government collapses and Corbyn comes to power it will hit the UK FTSE hard especially if they increase Corporation tax as they are currently proposing, force companies to give 10% of their equity (indirectly) to employees and embark on a programme of renationalisation of gas and electricity. Companies in the utility sector will face large demerger costs to separate their businesses where some parts are to be nationalised. Higher Corporation Taxes would have a direct effect on UK Companies ability to maintain dividend payments, so investment trusts with large dividend reserves will help mitigate this to some extent. I am continuing to add to my investment trust holdings (recently purchasing more DIG) and in the new tax year will most likely add another Investment Trust to my ISA portfolio. Goldpig
Merchants share price data is direct from the London Stock Exchange
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