Companies
TEMIT board to take decision on shares to NAV discount
The board of the Templeton Emerging Markets Investment Trust (TEMIT) will
decide at the end of the month whether to take action to narrow the discount its shares are traded at compared to its net asset
value (NAV). This follows a demand for action from City of London Investment
Management (CLIM), TEMIT's largest shareholder, made at the end of last year.
CLIM, which has a 13% stake in TEMIT, argued that the recent discount to NAV
of between 10% and 15% was evidence of poor performance and was unacceptable
when there had been a bull market within emerging markets. The institutional
investor
suggested that the discount was likely to widen further when the bull market
comes to an end.
CLIM requested that the views of other
shareholders be canvassed, and TEMIT responded by asking for written responses and holding a meeting
for shareholders last month.
CLIM suggested a buy back could be one method of narrowing the
discount.
However, in its response to the TEMIT consultation the UK Shareholders’ Association (UKSA), which represents
the views of private investors, called for shareholders to back the management
approach of investing funds rather than buying back shares.
TEMIT is managed by Mark Mobius at Franklin Templeton Investment
Management, and the UKSA said that the fund’s
performance had been better than most other emerging markets investment
companies. The UKSA added that changing the fund manager would also be unjustified.
Lombard in the Financial Times (8 February) said that other institutions
have offered some support for City of London’s views. The only way to please
investors, said Lombard, is for Mobius to improve the fund’s performance after
its less good showing in the past three years.
Links
Templeton Emerging Markets Investment Trust
Financial Times
March, 2007 |
