Polar Capital Global Fin... Share Discussion Threads

[kenmitch] 17/11/2016 15:19

edwardt.

Lots of Investment Trusts trade at discounts to NAV. Indeed that's one of their big plus points compared with Unit Trusts and OEICs. Investment Trust investors really can buy assets worth, say, £1 for sometimes as little as 65p. Occasionally Investment Trusts trade at huge discounts as high as 60%. otoh Investment Trusts that are very popular with Investors trade at large premiums to NAV. e.g all the Infrastructure ITs and also Lindsell Train IT.

Yesterday PCFT NAV was 132p undiluted and about 130p diluted/allowing for all the sub shares being exercised. So a discount around 8%. The discount is narrower now but in the past PCFT has traded at a premium to NAV when banks/financials were more popular with investors.

The PCFT discount might be higher or lower by July expiry. Whatever it is, it makes no difference to the value of PCFS. If the share is at 115p or below at expiry then PCFS will be worthless. If the share continues to do well the PCFS will soar. e.g as explained before if the share can get to 140p then PCFS will be worth 25p against a 8.8p buy price just now. Hence my opinion if confident the share will do well over the next 7 months or so, then buy PCFS and not PCFT. If not confident don't buy either yet. US bank shares have had a couple of down days and if that continues then a good chance that PCFT and PCFS will fall back a bit too.

Finally warrants and sub share spreads can change a lot from day to day and they are not always easy to trade. If looking to sell PCFS it's best to do it on an up day. e.g the PCFS quote is unchanged at 7.5p -9p for the third day running. But two days ago PCFS could be sold for 8.55p whereas today someone has just sold some for 7.5p.

There has also been a 150000 PCFS buy today so someone must be confident!

[edwardt] 17/11/2016 11:36

all good debate. it does beg the question then why does the discount exist?

[kenmitch] 16/11/2016 22:12

Spread is often not as high as it looks edwardt.

e.g yesterday when the spread was 7.5- 9p it was possible to sell at 8.55p. Trades at 8.55p were reported as buys but they were sells as I checked doing a dummy trade.

Yes no dividends on the subs but as the figures in my previous post show IF the share continues to rise the sub share gains well and truly make up for that.

The discount isn't "kept wide."

[edwardt] 16/11/2016 17:24

the sub shares are a form of leverage for the trust. it dilutes nav which you can now see in the daily nav announcement because they are deemed in the money. hence if the discount to nav is kept wide and below the exercise price, the sub shares expire worthless. also you do not mention dividends which the ords receive and are a further hurdle against the sub shares. all in, I would rather not gamble on the sub shares but see they could pay large profits if matters continue. lastly on buying them, there is the small matter of bid offer spreads north of 10% to navigate.

as this trust expires in nav by the board agreeing to liquidate in due course, that for me is sufficient to own this , despite the fact the nav largely tracks the msci financials index.

[kenmitch] 15/11/2016 10:30

I've only just discovered this thread and otherwise would have posted sooner. I've invested in warrants and sub shares for years and ran a successful warrant portfolio on mikewalters.com subscription website. We had to close it earlier this year because there are so few warrants and subs left. The portfolio ended up doubling but was once far higher. A drag on performance was a 50000 PCFS holding bought far too soon, but which would now be doing very well.

Unlike you topvest I only hold the sub shares (which being subscription shares can go in to ISAs btw). For those with a very low risk tolerance then yes, a mix of mostly share and small sub share stake makes sense. Otherwise just buy the sub share.

e.g right now with the share at 120p and sub about 9p to buy a £1000 sub share stake will be worth around £1900 if the share can rise 10% from here. That would give a £900 profit and maximum possible loss of £1000.

OR invest £9000 in the share to get the same profit. And if the share falls 10% the paper loss is not much less than for the sub share.

PCFS were highlighted on Mike Walters site as well worth buying at just 3.7p last month, and then again at 5p when the share was 115p only a few days ago.

Then with share at 115p a 15% share price gain to 132p and PCFS should more than triple thanks to the exceptionally high gearing then.

So invest £1000 in PCFS then at 5p and get a £2300 profit and maximum possible loss of £1000 for 15% share price gain.

OR invest £15000 in the share to get the same £2300 profit and if the share falls 15% the paper loss will be £2250 and £1500 more than the maximum possible loss on the sub share. BUT the big minus for the sub is that July deadline date. i..e a real loss if PCFT is 115p or lower at expiry whereas the share can be held until the price recovers.

edwardt mentioned the risk of the share price being manipulated so that the sub share expired worthless. That is very unlikely to happen as who benefits from the sub expiring worthless? None of us! The Trust will lose out on £millions of new cash to invest from the all the subs being exercised. Institutions lose out on £milliions too as they often hold very large sub share stakes.

Finally don't forget a trustee is appointed to exercise any sub shares if we decide not to sell them before expiry date and just let them lapse. Investors then get the proceeds less the trustee costs. Beware though if thinking of doing this as often the trustee does not get a good price for the share as it means selling a very large share stake that might have to be bought at a significant discount to the quoted share buy price. So best really if not intending to exercise the sub shares to sell them well ahead of the final expiry date.

[edwardt] 14/11/2016 14:22

guess we will see how many investors still think banks are uninvestable now. my guess is the discount will narrow to 5 in short order here.

[topvest] 11/11/2016 19:55

Yes, I wouldn't buy the warrants on their own. Own the ordinaries as well, and thought Id buy some warrants as a cheaper way of doubling up.

[edwardt] 11/11/2016 11:47

superb nav print over night.

[edwardt] 11/11/2016 09:20

hat tip to you sir. I did consider it but think the share price here is manipulated by the discount to ensure the warrants lapse worthless. That said, with events as such as they are, the nav gains alone could mean you multi bag there. I however am content in getting the pull to par on redemption on the ords

[topvest] 10/11/2016 21:08

I leveraged my holding here with the warrants. They are flying and are a good way to MAX your position here.

[edwardt] 10/11/2016 17:37

anyone now listening. yield curve steepening, this is the only game in town.

[edwardt] 04/10/2016 11:55

suspect nav now 120 with 105 share price = no brainer Rodney....

[edwardt] 25/8/2016 12:21

maybe but no need to repeat yourself! I suspect that valuations reflect low nim at banks already. with most trading at or below tangible book with roe's of circa 7%, you don't need rates to rise to build much of an investment case imo. That said, I like the fact that they avoid Italian banks as that looks like a car crash waiting to happen with the stand off on who picks up the tab for the huge non performing loans on their balance sheets. In a world where banks are still talked of in the pejorative, it often pays to get exposure when everyone hates them. this too me is a safer way of doing it by its focus on quality and international exposure. That said, if I had some balls I would simply by a basket of the challenger banks as they are on p/e's of 5 !

[gilston] 23/8/2016 16:23

All depends on when interest rates go up; not much sign of that happening just yet anywhere.

[gilston] 23/8/2016 16:23

All depends on when interest rates go up; not much sign of that happening just yet anywhere.

[gilston] 23/8/2016 16:23

All depends on when interest rates go up; not much sign of that happening just yet anywhere.

[edwardt] 10/8/2016 07:55

on my own here then - got to think this is a great way of exposure to financials. 12 to 14 discount with a catalyst for par.

[edwardt] 05/7/2016 09:49

great nav performance given the circumstances. 108 to 94 share price with a catalyst not a bad risk reward or am I missing something...

[peterbill] 30/6/2016 20:21

Banks out of favour, post referendum ... only hope here would be the exchange rate, earning foreign currency and converting back to Stirling.

[edwardt] 23/6/2016 16:09

time for the discount to narrow as financials rebound. bias against sterling will not help but European banks are on the up....

[peterbill] 13/1/2016 18:25

Top 10 HoldingsJPMorgan Chase & Co 3.06%ING Groep 2.86%Wells Fargo & Co 2.86%ACE Ltd 2.65%Societe Generale 2.45%Sumitomo Mitsui Financial Inc 2.24%OneSavings Bank 2.24%Sampo Oyj 2.14%Citigroup Inc 2.14%Direct Line Insurance Group PLC 1.94%

[peterbill] 18/12/2015 12:09

With the FED starting with a plan to raise the interest rates during 2016, this could be worth keeping an eye on. The Subs are trading below 5p.

[gilston] 18/11/2015 18:49

Going nowhere at present.

[peterbill] 08/6/2015 17:08

Mixed up the RNS ... see below

=======================

RNS Number : 5210P

Polar Capital Global Financials Tst

08 June 2015

POLAR CAPITAL TECHNOLOGY TRUST PLC

8(th) June 2015

Net Asset Value

As at close of business on 5(th) June 2015 the unaudited net asset value per share, calculated in accordance with the AIC formula (including current year deficit and based on bid market values) was 617.42p.

Polar Capital Technology Trust plc can earn a performance fee which would be payable at the year end, as a result of outperformance over the benchmark index, if the NAV per share (after adjusting for share buy backs and issuance and any accrual for the performance fee) exceeds the benchmark-adjusted high water mark.

The high water mark is the higher of the benchmark-adjusted NAV per share when the last performance fee was paid or the benchmark-adjusted NAV per share at the previous year end.

The current NAV per share is below the current benchmark-adjusted high water mark.

The performance fee, if payable, will be accrued daily.

- ENDS -

For further information, please call:

Tom Astor

Investment Trust Operations Department

Polar Capital Partners Limited

Tel: [phone]

[peterbill] 29/7/2014 19:28

Dividend Declaration

The Board has declared an interim dividend of 1.75p per ordinary share payable to shareholders on the register on 1 August 2014.

The dividend will be paid on 22 August 2014 and the shares will trade ex-dividend from 30 July 2014.