Monthly Report
June 16 2003 - 11:05AM
UK Regulatory
RNS Number:3748M
Anglo & Overseas Trust PLC
16 June 2003
Anglo & Overseas Trust
REPORT FOR THE MONTH OF MAY 2003
REVIEW
Equity markets have continued to rally as the war relief rally converts into a
reassessment of current valuations.
We continued to maintain our level of borrowings which has helped performance in
a rising market.
UK
The UK equity market continued to recover from the depressed levels achieved
earlier in the year, with the FTSE All-Share Index rising by 4.1% in capital
terms. Medium-sized and smaller companies continued to outperform, with the FTSE
Small Cap Index rising by 10.8%, the FTSE Mid 250 Index by 9.7% and the FTSE 100
Index by 3.1% in capital terms.
The best performing sectors over the month were Household Goods & Textiles and
the "TMT" areas of Software, IT Hardware, Media and Telecoms. "Cyclical" areas
such as Engineering and Forestry & Paper also outperformed, as did Insurance and
Real Estate. The worst performing sectors were the "defensive" areas of Food
Producers, Beverages, Pharmaceuticals and Utilities.
Major transactions during the period included adding to existing holdings in
Imperial Tobacco and establishing new holdings in Gallaher and Unilever.
Holdings were sold in both HBOS and Rank Group and reduced in BPB.
USA
The S&P 500 moved higher for its third straight month in a rally that has driven
the broad index up 20% since mid-March. In May, equity market gains seem to be
attributable to a pickup in investor optimism following generally
stronger-than-expected first quarter earnings and by the passage of a $350
billion stimulative tax plan.
Concerns over the weakening dollar and an increase in the terrorism threat
indicator put some downward pressure on equity markets, but not enough to
prevent them from moving higher. The US dollar sank to multi-year lows against
the euro and the Japanese yen amid what some saw as signs that Washington was
discarding its strong dollar policy. Treasury Secretary John Snow declared that
the value of the US dollar should be determined by market fundamentals and
public confidence. Many interpreted the statement to imply that the Bush
administration is indifferent to the weakening dollar and has no intention of
taking action to halt its decline. The perceived shift in policy raised fears
that further dollar declines would frighten foreign investors into withdrawing
from U.S. investments.
The tax package, which will cut taxes on dividends to 15%, understandably drove
up shares of some high yielding sectors such as utilities. Tobacco shares gained
after a court overturned a $145 billion verdict against several tobacco firms.
Pharmaceutical shares were weaker after an unfavourable court ruling related to
uninsured patients in Maine.
The broad market S&P 500 gained 5.1%, in USD terms, for the month. The utilities
and energy sectors were the biggest contributors to its performance.
Transactions during the period included purchases of Biovail, a specialty/
generic pharmaceutical company, Coca Cola and Hartford, shares of ConAgra were
sold.
Japan
The Japanese market rallied in May, primarily on the back of a stronger US
market and the inflow of foreign institutional money during the month. Short
covering of lower quality, low priced stocks in technology and related sectors
following the public injection of funds into Resona Bank also helped to push the
market higher. While Japanese macro economic announcements during the month
continued to point to a weak Japanese economy, corporate profitability for the
year ending March 2003 was strong with operating profits for non-financial
companies up 17.5% on last year, mainly due to cost cutting. During the month we
established a holding in Chubu Electric Power, whose dividend yield of 2.6%
looks secure and attractive relative to the market. We reduced the holding in
Japan Telecom and added further to the large holding in KDDI. We reduced the
holding in trading company Mitsui & Co in favour of Mitsubishi Corp. We sold our
position in Keyence following a good run, which left the share looking fully
valued.
EUROPE
Markets rose over the course of the month, as investor risk appetite increased
and optimism about monetary easing developed.
We were relatively active, with total sales of Metro (retailing), Danone (food
manufacturing), Fortum (utilities) and Tieto (technology). In addition we
reduced our large overweight in Telecom Italia after a strong performance.
On the buy side we established new positions in BNP (banks), BMW (cars),
Generali (insurance) and Henkel (consumer products.
NET ASSET VALUE 31/05/03 30/04/03
prior charges at nominal value 202.16p 194.37p
prior charges at market value 183.57p 177.80p
MID-MARKET SHARE PRICE
Ordinary Share 161.50p 156.50p
Dividend Yield (%) 2.4 2.5
DISTRIBUTION OF ASSETS at market value 31/05/03 30/04/03
Market exposure
% %
EQUITIES
United Kingdom 43.7 43.5
U.S.A. 32.7 33.2
Latin America 0.6 0.6
Japan 4.2 4.2
Belgium 0.4 0.4
Denmark 0.4 0.4
Eire 0.1 0.1
Finland 0.6 0.9
France 1.6 1.6
Germany 1.8 1.8
Greece 0.1 0.1
Italy 1.4 1.4
Netherlands 0.7 0.7
Norway 0.1 0.1
Portugal 0.4 0.4
Spain 1.0 0.8
Sweden 0.5 0.6
Switzerland 2.3 2.3
TOTAL PORTFOLIO 92.6 93.1
Net Current Assets 7.4 6.9
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TOTAL 100.00 100.00
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Based on total assets less current liabilities of #279.9 million (#271.7 million).
GEARING
Borrowings and Gearing at 31/05/03 30/04/03
#000's #000's
Debenture Stock 2020 34,405 34,402
Debenture Stock 2012 33,708 33,696
----------- -----------
68,113 68,098
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33.4% 33.4%
===== =====
Based on net asset value of #211.8 million (#203.6 million).
LARGEST HOLDINGS (market value #105.5 million equal to 40.7% of total portfolio)
#'000's % of
portfolio
HSBC Holdings 9,755 3.8
Vodafone Group 9,008 3.5
GlaxoSmithKline 8,438 3.3
BP 8,311 3.2
Royal Bank of Scotland 6,699 2.6
Shell Transport & Trading 5,841 2.2
AstraZeneca 5,777 2.2
BT Group 3,689 1.4
Bank of America 3,533 1.4
Microsoft 3,449 1.3
Citigroup 3,440 1.3
Exxon Mobil 3,424 1.3
General Electric Co. of America 3,115 1.2
Scottish and Southern Energy 2,930 1.1
Pfizer 2,906 1.1
Imperial Tobacco 2,883 1.1
United Technologies 2,737 1.1
Lloyds TSB 2,668 1.0
Johnson & Johnson 2,598 1.0
Cisco Systems 2,562 1.0
Tate & Lyle 2,537 1.0
Barclays 2,424 0.9
Unilever 2,318 0.9
Standard Chartered 2,213 0.9
3M Company 2,208 0.9
FINANCIAL CALENDAR 30 June 2003
Half-year end
For further information, contact Mark Pope at Deutsche Investment Trust Managers
Limited on 020-7545-6000.
For additional copies, changes of address or details of our Private Investors'
Plan, low cost ISA, PEP Transfer and Dividend Reinvestment Plan (a plan through
which shareholders, who hold their shares on the Company's main register, can
use their dividends to purchase further shares) contact Mark Pope on
020-7545-0520, e-mail address: mark.pope@db.com. Further details of Anglo &
Overseas Trust including the latest annual, interim and monthly reports can be
found on the Deutsche Investment Trust Managers website located at
www.deutsche-its.co.uk.
Issued by Anglo & Overseas Trust PLC and approved by Deutsche Investment Trust
Managers Limited, authorised and regulated by the Financial Services Authority
and manager of Anglo & Overseas Trust PLC. Investors should be aware that past
performance is not necessarily a guide to future returns, the price of shares
and the income from them can fall as well as rise and investors may not get back
the amount they invested. Fluctuations in exchange rates may also affect the
value of your investment. Anglo & Overseas Trust PLC may invest in shares traded
in emerging markets which may at times be illiquid and/or volatile.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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