Close Finsbury Trust meeting HSBC to discuss ways of reducing price spread
The board and managers of the Close Finsbury Trust are to meet with their market makers, HSBC, on 19 June to discuss ways of reducing the current price spread on the trust.
Jamie Borwick, chairman of the trust, said: 'The gap between the prices at which these dealers, who are entirely independent of the company and outside its control, will buy and sell our shares (the bid-offer spread) has routinely been above 15% and, in the case of one market maker, exceeds 25%.
'This may mean that shareholders will have to pay a price for our shares that is far and away from the mid-market price published in the newspapers.
'Though a higher than average spread may be expected in illiquid shares such as ours, all our shareholders can be assured that we are trying our utmost to reduce the spread.'
Alastair Smith, managing director of Close Finsbury Asset Management, said that Close Finsbury was concerned about the width of the trust's bid-offer spread and has been working to increase liquidity in its shares in order to reduce the spread. This will be the main topic for discussion with HSBC.
One suggestion would be to try to get existing shareholders to sell their shares to the marketmakers, according to Borwick.
The Close Finsbury Trust invests in a portfolio of special situations, where its holdings constitute a significant portion of the companies concerned.
For the year ending 31 March 2001, the NAV per share of the Close Finsbury Trust fell by 7% to 413.9p, compared with a fall of 12.9% in the company's benchmark index, the FTSE All-Share.
The directors of the trust are proposing a final dividend of 3.2p per ordinary and 'A' ordinary share. This will be payable, subject to shareholder approval, on 28 September 2001 to shareholders who were on the register of members at the close of business on 15 June 2001.
The majority of financial advisers (85%) believe the number of self-invested personal pension (SIPP) providers will continue to fall in the coming year, according to Dentons Pension Management research.
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