The continued rise in value of shares in Foreign & Colonial Investment Trust ahead of a FTSE 100 ind...
The continued rise in value of shares in Foreign & Colonial Investment Trust ahead of a FTSE 100 index listing looks certain to offer a significant 'sell' opportunity for investors, according to investment trust sector analysts.
Shares in F&CIT have jumped more than 4% this week taking its market value to more than £1.4bn, and it looks likely shares will start to trade at a premium to the NAV once FTSE 100 tracker funds start placing buy orders determined by the stock's index weighting.
The company moved to a premium the last time it entered the FTSE 100 in the mid-1990s, before investors realised there were better deals to be had from buying shares in peers trading at discounts.
Ironically, F&CIT is currently trading at about 150p, well off its 52-week high of 235p set last spring, and well below the 288.5p price hit in September 2000.
Still, the company has trod a better path than, for example, Cable & Wireless and Corus – the former was dumped out of the FTSE at the last review, and the latter is set to go this time round.
Analysts say, however, that any move by the stock to trading above its NAV could be short-lived, and any money would be better invested elsewhere before the market decides to open up a discount on the stock once more.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation