Can you explain your CNI purchase, plus current thoughts towards VUK

Hi Ian,

What we are reading and listing to around the outlook for interest rates is well and truly factored into the market. Real-Estate trusts /companies are trading at significant discounts to the carrying value of their assets –  30% in some cases already pricing this revaluation lower.  If this revaluation lower is less than what the market is currently factoring in, which is our view at MM, then the stock prices will actually rise on that outcome.

Markets are prone to get too optimistic and too pessimistic on things, we think broadly the latter has played out with CNI. That said, CNI is at the higher end of the risk spectrum as they have made the decision not the hedge interest rate risk. The Australian 10 year yield for example is down ~0.70% from its highs so this is working out okay so far, however, many of the other property companies have taken a more conservative route and spent large sums on hedging for certainty.

Virgin Money (VUK) actually looks good following their last update – could easily see it rallying into the mid $3’s.

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Virgin Money UK (VUK)

LAST UPDATED 24/11/2022 16:41

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Virgin Money UK (VUK)

LAST UPDATED 24/11/2022 16:41