Shares still not dear, says Shires

15th Nov 2010 15:49

Shires Income, the investment trust with a predominantly UK equity portfolio managed by Aberdeen Asset Managers, achieved a total return on net assets ahead of its benchmark, the FTSE All-Share index, in the six months to the end of September.The total return, including dividends, was 3.9%, versus a 0.2% gain on the All-Share over the same period. Net asset value (NAV) per share at the end of September stood at 188.09p, up 0.5% from the end-March NAV per share of 187.13p.Gearing declined from 31.4% to 27.6%, thanks to a £2m reduction in borrowings. At the end of September 2010, around two thirds of gross assets were invested in equities with the balance in preference and convertible shares. No new investments were made in preference or convertible shares in the period."Equities do not appear to be expensive on either an absolute basis or relative to other asset classes. It should be remembered though that it will be difficult for companies to repeat the levels of profit growth witnessed in the last six months in the absence of a recovery driven improvement in sales," observed chairman Anthony Davidson. "The weakness of sterling will aid exporters, but only if there is end market demand. The difficulties facing the US and some of the more indebted European nations and actions taken by the Chinese authorities to dampen growth in their economy mean it is unsurprising that expectations for 2011 are beginning to be reined in. Therefore, care needs to be taken when looking at market valuations in aggregate," Davidson added. The interim dividend has been maintained at 3p.