European Opportunities Trust PLC has released a new fact sheet, detailing portfolio holdings and past performance statistics as of the end of July. The MSCI Europe index rose 0.5% in sterling, while the Company's NAV increased by 1.1%. The Company had net borrowings of 42.7 million at the end of July, with a discount to NAV of 10.3% at month end.
There are indications of slower economic growth, with analysts reducing growth forecasts for China and signs of weakening growth rates in the US and Europe. These macro trends have impacted various sectors, such as European luxury and beauty companies, drinks companies, and the automotive industry, particularly for electronic vehicles. Technology also weakened due to concerns about political tensions between the West and China.
The Company's performance in July was influenced by various holdings. Genus issued a profit warning for next year, but the shares improved due to surging pig prices in China. Grifols and Camurus made modest contributions to performance, while Prysmian reported good results. However, Novo Nordisk's shares slipped sharply due to concerns about new entrants eroding its leading position, and Ryanair's shares were affected by pricing weakness.
The Company made significant trades in July, including the complete sale of Darktrace due to a narrowed discount to the takeover price, and the sale of some shares in RELX and a reduction in the holding in Grenke. The major purchase was of more shares in Edenred, whose earnings outlook remains positive.
The outlook acknowledges weakening consumer spending and negative sentiment around investing in Europe. However, the Company remains confident in its mix of innovative, differentiated companies and their ability to reward patience.
In conclusion, the update provides a comprehensive overview of the Company's performance, portfolio holdings, and market trends, offering insights into the factors influencing its performance and the strategic decisions made during the month.