
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

February 2009
Once again, I report that Continental Europe outperformed the UK for another month. In EUR, Continental Europe fell -7.4%, whilst the UK (in GBP) fell - 10.7%, bringing the respective YTD figures to -8.2% and -30.5%; a very dramatic differential. What are the drivers behind this? Towards the end of last year and certainly in January, the market had anticipated balance sheet restructurings through discounted rights issues particularly in the largest UK names. As possibility became reality, the dilutive impact of heavily discounted rights issues drove share prices down further. Land Securities, British Land, Hammerson and Segro have announced underwritten raisings totaling £2.65bn. These equity injections have given these companies (broadly) 35% headroom, ie capital values can fall a further 35% before loan covenants are tested again. The performance of these share prices post their various announcements has been mixed. The market remains concerned that (1) these injections are not sufficient and / or (2) that the earnings will continue to come under pressure as the recession bites and the promised (rebased) dividend levels are not sustainable. For Sigma’s relative performance it was a good month as the portfolio is significantly underweight these large UK companies. The benchmark fell -8.2% whilst Sigma’s NAV fell -5.21%. However this figure is flattered by the add back of recovered historic VAT which amounted to £0.93m (1.27% of month end NAV). Over the month, Sigma invested a net £1.0m. Sales were focused on a mixture of UK large caps such as Land Securities and British Land as well as smaller names such as St Modwen and the remainder of our Brixton holding. On the Continent, we invested €1.3m in CFI, a French REIT which is an acquisitive cash shell run by Leon Bressler (ex CEO of Unibail). Other additions to the portfolio were Wereldhave , Eurocommercial and Silic all significant businesses with (in our view) robust balance sheets. Post the announcements of these rights issues we have added to our holdings in Hammerson and Segro, both of which we consider better value than their larger competitors in the UK. Sigma continues to hold over 17% net cash. In the short term, the likelihood of an increase in the availability of new debt finance (or even refinancing on attractive terms) to property companies remains remote. Central banks and governments have more pressing problems than focusing on the indebted real estate communities. Self help through capital raisings and asset sales remains a priority for those businesses who can… and they should.