Morning briefing: Seraphim Space promoted to FTSE 250; SHIP makes 12.7% return from Hormuz blockade; JPMorgan China “somewhat” protected after 9.5% half-year fall; Mike Ashley buys Grainger stake; Segro talks to activist; Helical launches £5m buyba
Seraphim Space (SSIT) will join the FTSE 250 on 19 June after a 39% share price rise this year and last month’s £127m C-share issue lifted the market value of the world’s first listed SpaceTech fund to £698m at Friday’s close. Chair Will Whitehorn said elevation to the “mid-cap” index was a “significant milestone” and was “a clear reflection of the progress we have made in scaling the company over the last five years and demonstrating the attractiveness of SpaceTech as an institutional asset class.”
QuotedData senior analyst Matthew Read said: “We are delighted to see Seraphim Space move into the FTSE 250, reflecting the considerable progress made since its launch just five years ago. SSIT has benefited from stronger portfolio valuations, rising investor interest in SpaceTech and its successful £137m C-share raise, all of which have helped lift its market capitalisation to index-entry level. ICEYE, SSIT’s largest holding, has been a standout contributor, with its valuation rising materially on strong operational progress and major contract wins, including in defence and intelligence. This underlines how space is moving beyond a specialist technology theme to become part of the critical infrastructure underpinning communications, surveillance, climate monitoring and national security.
“FTSE 250 inclusion should bring practical benefits, raising SSIT’s profile with institutional investors, increasing index-related demand, improving liquidity and potentially broadening the shareholder base. It should also help SSIT attract future capital, which will be useful given the depth of the opportunity the manager sees in SpaceTech.”
Tufton Assets (SHIP), the £350m shipping fund, made a 12.7% investment return in April and May as the war in the Middle East drove up the rates at which it charters out its product tanker and bunker vessels. Issuing an unscheduled intra second quarter update on Friday in response to the “unusual market conditions” arising from the blockade of the Strait of Hormuz, the company said its net asset value (NAV) per share had risen from $1.395 at 31 March to $1.546, with May’s operating result its highest in three years. The boosted return came as the negative charter rate – which measures the difference between what ships are currently chartered at versus what they could earn on a new contract – fell from $31.6m to $18.1m. “The investment manager remains cautiously optimistic and looks to further increase the yield on charters for the eight vessels due for charter renewable later this year.” The 7.6%-yielder will publish a full second quarter NAV and dividend on 15 July.
JPMorgan China Growth & Income (JCGI) beat a falling Chinese stock market in the six months to 31 March with a 9.5% fall in net asset value compared to a 13.8% decline in the MSCI China index. The economic shock wave from the US-led war on Iran launched at the end of February exacerbated concerns over software stocks facing competition from new artificial intelligence rivals, although “robust exports and AI-related structural growth provided a steady tailwind,” said JP Morgan fund managers Rebecca Jiang, Howard Wang and Li Tan in the half-year results. Chair Alexandra Mackesy expressed disappointment at the fall but was pleased that efforts by the managers to improve performance and stock selection. Shareholders’ total half-year loss was slightly less than the NAV decline at 8.5% after the share price discount narrowed from 9.7% to 9%. Mackesy said the portfolio had been “somewhat” protected by being 42% invested in Shanghai and Shenzhen listed China A-shares which had been more resilient than H-shares in Hong Kong.
Segro (SGRO), the £9.6bn real estate investment trust and warehouse investor, has held talks with Singapore-based activist Lauro Asset Management about its idea of spinning off Segro’s datacentre arm and floating a stake in the Netherlands, the Sunday Times reported.
Mike Ashley, founder of Frasers (FRAS), the Sports Direct owner, has bought a 4.2% stake in Grainger (GRI), the £1.1bn residential landlord trading at around a 50% discount to net asset value. The holding was disclosed on 5 May but reported in Moneyweek last week. The story came shortly before Sky News reported that Frasers was considering a £500m bid for the Metrocentre shopping centre in Newcastle.
Helical (HLCL), the £245m central London real estate investment trust, has instructed its broker Peel Hunt to begin a £5m share buyback to return surplus capital to shareholders. The repurchases will last up to 30 September, with the company expecting to renew its annual buyback authority at the annual general meeting in October.
QuotedData’s Matthew Read said: “Helical’s decision to launch a £5m share buyback is a sensible use of surplus capital given that its shares are trading at around a 47% discount to the company’s most recently reported NAV. Repurchases at these levels are highly NAV accretive for remaining shareholders, although the scale of the programme is quite modest and it is difficult to see this achieving a sustained improvement in the company’s rating. For that, investors will probably need greater confidence in office values, leasing momentum and the broader interest-rate backdrop. Still, the buyback sends a helpful signal that the board sees value in the shares and is prepared to act where the discount looks excessive.”
Ceiba Investments (CBA), the £48m Cuban property fund that gained bondholders support for a 12-month loan extension in February, has received Cuban government approval for it taking full control of Monte Barreto, the owner of the Miramar Trade Center in Havana. Negotiations for the transaction, which is funded by Monte Barreto, began in 2017.
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