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CQS grows net asset value on the back of 'more sanguine' markets

Fri 06 October 2017 11:41 | A A A

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(ShareCast News) - Closed-end investment company CQS New City High Yield Fund Limited said on Friday that it had grown its net asset value (NAV) 16.13% in the year ended 30 June 2017 as markets gradually became "more sanguine" towards concerns that had muted its investment returns in the previous year.

CQS, which predominately invested in fixed income securities, increased its net asset value per share to 58.77p from the 54.68p a year earlier as share price premium to NAV rose from 3.5% to 6.8% with a total share price return of 18.4% in its 2017 financial year.

The Jersey-based firm said it had an effective gearing of 8% as it raised £5.3m through share issues over the twelve months, as well as an additional £4.3m lining its coffers since year-end.

Full year dividends were 4.39p, a slight uptick from the 4.36p it paid out a year earlier.

Looking forward, CQS chairman James West said, "The prospect of further gradual rate rises in the United States and a Eurozone economy strong enough to promise a decline in Quantitative Easing underpin a benign environment which your Company is well positioned to take advantage of as opportunities arise."

"When I wrote to you last year, I reflected on a period of muted investment returns occasioned primarily by fears as to the robustness of the Chinese economy set alongside Eurozone and Brexit concerns. The last year has seen the markets more sanguine as to these issues, while they have responded positively to the election of President Trump and investment returns have accordingly been much stronger," West added in the group's note to investors.

The company also announced that John Newlands had joined its board as a non-executive director.

Newlands, who had more than twenty years' experience in the City had spent the last ten years of at Brewin Dolphin as the group's head of investment companies.

"I am delighted to welcome John to the Board. The depth of his experience and expertise in the investment trust sector is universally recognised, and I look forward to all that he will bring to the board's deliberations as the Company looks to build upon the success of recent years," said West.

As of 1200 BST, shares had moved ahead 0.41% to 61.75p.

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