Year of two halves for City Natural

14th Oct 2011 16:58

The financial year to the end of June was very much one of two halves for City Natural Resources High Yield Trust, with the second part of the year seeing a more subdued performance than the first."The buoyant equity markets in the first six months of the company's year saw the net asset value rise by 84% over that period, with further assistance coming from rising commodity prices, continued merger and acquisition activity across the resources sector and weakness in Sterling relative to the Australian and Canadian dollars," noted the investment trust's investment manager.That buoyancy gave way to concerns about the macroeconomic environment in 2011 while resource markets also reacted to heightened political risk, such as the events in North and West Africa.By the end of June, the company's net asset value total return had eased to 58.8%, though this still knocked the performance of the trust's benchmark index (+27.1%) into a cocked hat.Net asset value at the end of June stood at 354.2p.The full-year dividend has been increased by 13.7% to 4.22p."While during the year risk perceptions have risen and global growth expectations have reduced, in the medium term it remains our view that natural resources will remain in demand," the company said. "The amassing of enormous reserves in the BRIC [Brazil, Russia, India, China] economies, earned from feeding old world consumers, creates conditions for consumption to rise in the new world. The only question is how fast this will take place, and in China, India and Brazil the early signs are there," the statement added. --jh