The tide has turned
Having played a supporting role in the initial phase of the stock market recovery – breaking historical precedent in the process – the share prices of financial stocks, and banks in particular, have come back sharply since November. Demand for its shares meant that Polar Capital Global Financials Trust’s (PCFT’s) premium rating was recently at its highest level in more than five years, paving the way for share issuances. Banks were well-capitalised going into the pandemic, so the much-milder-than-expected impact on loan defaults to date, coupled with the prospect of economies gradually re-opening, is shifting the discussion forward to the potential impact of pandemic stimulus on inflation, and ultimately increases in interest rates. Meanwhile, distributions, in the form of dividends and share buybacks, are returning and billions of dollars' worth of loan reserves are being released unused.
Polar Capital Global Financials Trust is an investment trust company. Co. invests primarily in a portfolio consisting of listed or quoted securities issued by companies in the financial sector operating in the banking, insurance, property and other sub-sectors. Co. has contracted Polar Capital LLP to act as the Alternative Investment Fund Manager.
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