Sterling Investments continues with overseas bonds
Published:Sunday | August 15, 2021 | 12:09 AM
Boutique investment company Sterling Investments Limited, SIL, is buoyed by a rebound in bond prices and resultant portfolio growth.
Marian Ross, vice president for trading and investment at Sterling Asset Management, the company that manages the SIL portfolio, says SIL will continue purchasing undervalued assets, looking for pockets of opportunity in the market and taking advantage of spikes in volatility when they occur.
“There is a strategic benefit for US dollar bonds in the Sterling portfolio. We think that our exposure is such that we will be among the first companies on the local stock exchange to benefit from the global economic recovery,” Ross told SIL shareholders at the company’s annual general meeting on Thursday.
Ross said the market activity in the midst of the COVID-19 pandemic was a net positive due to higher revenue, more trading opportunities and a lower credit risk than comparable instruments on the Jamaica Stock Exchange.
After posting a year of positive results in 2020, SIL reported $80.4 million in total revenue for the first quarter ended March 2021, an increase of 53 per cent over the similar period in 2020. Net income was $55.23 million compared to $4.58 million in 2020. The June quarter results are pending.
Speaking to the Financial Gleaner after the AGM, Ross said SIL held its own under COVID-19 market conditions, and that investment companies ought to be able to take advantage of market opportunities in different environments, even adverse ones. SIL’s strategy is to go after investments once they fit within its ‘risk and reward’ framework.
“That investment could take many forms, for example buying an equity stake in a real sector company that is for sale; or buying undervalued equities on the global stock markets,” she said.
“Some of the US stocks SIL has invested in have returned over 100 per cent during their holding period,” she added.
SIL closed its last financial year with assets of $1.9 billion, the highest since its inception in 2013, and built on that in the March quarter, which topped the $2 billion mark.
Ross says the company is benefiting now from the recovery in asset prices following the worldwide plunge in 2020, and that SIL’s focus is to look out for assets that are attractively priced and could yield good returns for shareholders, whatever form those assets take.
While acknowledging that the new wave of COVID infections could throw up challenges, Ross says SIL is ready to react to changing market conditions.
“The company maintains ample liquidity to be able to take advantage of any market sell-offs that occur due to any fallout from the third and fourth waves of the pandemic. We also manage the duration of the portfolio which influences the impact that market sell-offs can have on the company’s investments,” she said.