Temple Bar has won back its place in the FTSE 250 after its shares rebounded sharply thanks to the rotation into value stocks.
The value-orientated investment trust was dropped from the index last September after the coronavirus crisis wiped 50% off the value of its share price, leaving it with a market cap of £462.1m.
Months before that the investment company was rocked by news longstanding manager Alastair Mundy would be stepping down. RWC duo Nick Purves (pictured) and Ian Lance replaced Mundy in October.
However, the trust has rebounded strongly since the pair took over thanks to the rotation into value stocks fuelled by positive vaccine developments. Its shares have risen 61.4% from 700p at the end of October to 1,130p currently, giving the trust a new market cap of £754m.
It was officially admitted into the blue chip index on Friday, taking the place of TalkTalk Telecom Group.
FTSE 250 promotion will give Temple Bar more exposure and liquidity
“I am extremely pleased to see Temple Bar joining the FTSE 250 index,” said chairman Arthur Copple. “The promotion will bring Temple Bar increased exposure and liquidity at a time when there is an exciting story to tell about the portfolio and its prospects.”
“The board is very happy with the recent performance of the trust both in NAV and share price terms, with the recent promotion being a recognition of the considerable effort that we and the manager have made to offer something different to investors,” he continued.
“The managers believe that, despite the significant returns the trust has delivered to our shareholders since they took over Temple Bar, the valuation of many of the stocks in portfolio are still looking incredibly cheap.”
Lance and Purves (pictured) said being reinstated into the blue chip index “adds further strength to our belief that the trust remains a compelling long-term opportunity for investors”.
“The combination of UK equities trading at the greatest discount to global equities for fifty years and UK value stocks remaining at the greatest ever discount to growth stocks, coupled with the possibility of economic recovery in 2021 which should favour cyclicals and financials, signals that the trust is well-positioned for a continued rotation to value,” they said.
