While BTEM’s NAV increased by +1.6% over the month, this return lagged broader markets due to a widening portfolio discount (out to 29.1% from 28.4%) and weakness in a few key holdings. The largest contributors were Jardine Strategic (+56bps), Wendel, Oakley Capital Investments, Investor AB, Cosan Ltd., Pershing Square Holdings, and Tetragon Financial (+21bps); the largest detractors were Tokyo Broadcasting System (-45bps), Riverstone Energy, Third Point Offshore Investors, and EXOR (-10bps).

Having added to Jardine Strategic (JS) in early June when its discount widened out to 39% (close to its 5y high), we were pleased to see a re-rating over July (albeit partially given back post-month-end) as its discount ended the month at 29%. During the month, both JS and a number of its underlying holdings reported half-year results.  The share price of Jardine Cycle & Carriage (23% of JS’ NAV) increased +6% with largest holding Astra reporting strong results at its Heavy Equipment and Mining division, and improvements at its underperforming Autos division.  A +5% increase in Jardine Strategic’s interim dividend was well-received, and highlights the stability of the group which has increased or maintained its dividend every year since 2000.

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