
Ordinary Shares

Price (p)	149.00
Published NAV	170.30
Yield	3.89
Discount	-13.91

Prices correct as of close 2010-09-06. Last Published NAV is as at the previous business day. Source: Trustnet

Sigma Shares

Price (p)	66.70
Published NAV	88.10
Yield	3.00
Discount	-24.69

Prices correct as of close 2010-09-06. Last Published NAV is as at the previous business day. Source: Trustnet

For Ordinary Shares

December 2008
It was another historic month which saw extraordinary efforts by policy makers to avert the seizure of the Global economy. Very aggressive base rates reductions were accompanied by spectacular currency movements. Having rallied in late November, UK property shares bobbed about over the month but ended virtually unchanged having little immediate revenue advantages from official interest rate declines. European stocks (in Euros) rose 5%. On average they have greater exposure to variable rate and short term debt and therefore more potential benefit from lower rates. In Sweden, where base rates almost halved to 2%, property stocks rose 23% in Kroner terms. A relief rally in the very volatile German property share market saw pricing up 40% in Euro terms, but still down 55% on the year. Sterling had a torrid month, falling 16% against the Euro. Thus the 5% gain by European property shares in Euros terms became a 22% gain in Sterling and the benchmark return of -2% in Euros became plus 14.50% in Sterling. Compared with this latter figure the Ordinary share NAV rose 11.83% and the share price rose 10.48%. The underperformance came chiefly from the lack of holdings in a number of very highly geared stocks some of which doubled over the month. The performance was aided by having most of the cash in share class in Euros. We started December with gross cash of £70m of which only £8m was in Sterling. Over the month we were modest net sellers for £1m net across a broad range of equities, mostly mid or small cap stocks. By the month end gross cash was £81m thanks to currencies movements. We enter 2009 with the increased likelihood of rights issues. The cut in base rates combined with improvements in debt pricing ought to help stabilise the property yield structure, but bank debt for commercial property investment is still both scarce and expensive and likely to remain so for the time being. Meanwhile the very sharp decline in economic activity is clearly now putting rental values under pressure and vacancy rates are starting to grow. We remain cautious of this market.