
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 Sigma Shares

April 2009
Real estate shares across Europe enjoyed their strongest month ever with FTSE EPRA/NAREIT Developed Europe Index rising +13.7% (in GBP). Sigma’s new benchmark (which is index adjusted to exclude those companies with a market cap of more than £1bn) rose even higher to +15.9%. The broad equity market rally which started in mid March has not left property stocks behind and by the end of April they were up +35% from the low point of 9th March. Why so strong a rally for a sector generally viewed as a late cycle play? During January and February, the fear was that a considerable number of real estate businesses would be unable to raise equity to stave off lenders as debt covenants were breached. Even for the stronger business models, aggressive banks would raise margins and suck out cashflow. Lack of credit availability continued to weigh down on markets. During mid March, these fears abated as the aggressive steps taken by central banks to create liquidity began to be seen as likely to bear fruit and by April, there was a growing positive momentum in the market. For real estate stocks, those priced for imminent failure rebounded the most. Smaller companies outperformed larger ones as illiquidity had the reverse effect and forced prices higher quicker.
Although the fund reduced its cash exposure in April, it remains defensively positioned and continued to avoid businesses lacking balance sheet stability. As a consequence the NAV rose +13.6% underperforming the EPRA Small Cap index by 225 bps. Net investment in the month totalled £2m and this included taking up rights in Segro’s 12 for 1 rights issue. Also taking advantage of the change in sentiment towards the end of the month, Liberty International announced its capital increase and successfully raised £640m. Sigma does not hold Liberty. We expect further raisings if the market continues to price in future positive news. The share price rose 28% in the month from 39p to 50p benefiting from both asset value appreciation as well as considerable tightening of the discount to NAV (from 36.4% to 28.7%).