The £2.6bn Foreign & Colonial Investment Trust repurchased a further 300,000 shares on 17 January. ...
The £2.6bn Foreign & Colonial Investment Trust repurchased a further 300,000 shares on 17 January.
Jeremy Tigue, fund manager of the trust, said: "We bought back the shares from an institutional seller as part of an ongoing process to manage the discount.
"They came on to the market and it has been our policy for some time to repurchase shares in the trust which come up for sale."
According to Tigue, the discount is unlikely to widen in the short term, he believes it will remain around the 10% mark for at least the next 12 months.
He said: "Market conditions are conducive to stability, retail demand in particular is quite strong for the trust as we enter the Isa season."
The shares were bought back from an unnamed institutional shareholder five days after the trust bought back 36.25 million shares, including all of the shares owned by Sierra Trading which totalled 11.3 million.
Sierra Trading Partners announced on 11 January that it had raised £185m from the sale of stock in six UK closed end funds, one of which was F&C.
Sierra had filed a motion in December for six investment trusts, including F&C, to propose a share repurchase at their AGMs which would have enabled Sierra to sell its holdings at a discount of about 2% to NAV.
The proposals required the trusts to repurchase up to 70% of their shares at 98% of asset value.
Since Sierra withdrew its proposals the six funds, Bankers, Foreign & Colonial, Monks, Murray Income, Murray International and the Scottish Investment Trust, have all bought back the shares owned by Sierra for cancellation purposes.
The repurchase by F&C trust meant Sierra was able to sell on a discount of 10%, their original investment two years ago being made at a discount of around 17%.
Foreign & Colonial's NAV per share rose by 1.2p after the first buy-back and stood at a discount of 9.6% on 11 January.
By 17 January, the discount had widened to 11%.
The board will propose a renewal of the share buyback authority at the forthcoming annual general meeting to be held in May.
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