Latest news with #CEF
Forbes
13 hours ago
- Business
- Forbes
3 Cheap CEFs With Yields Up To 12%
Buy on the dip, purchase stock when price drop, trader signal to invest, make profit from market ... More collapse concept, smart businessman investor buy stock with down arrow graph. We've got a rare 'delayed reaction' income play on our hands right now. Thanks to the April stock-market plunge, we can now pick up 12%+ dividends at attractive discounts. But I don't expect this cheap CEF opportunity to last very long. I know early April feels like a while ago, but it created our opportunity, and the chance to buy is still available today. It lies in closed-end funds (CEFs). (I'll show you three that pay those outsized 12%+ yields in just a second.) In a nutshell, these three funds trade at discounts to their portfolio values—known as 'net asset value,' or NAV, in CEF-speak. And many of those discounts still haven't recovered from the April 'tariff terror.' When we buy a CEF at, say, a 10% discount to NAV, we're essentially paying 90 cents on the dollar. As that gap narrows, we essentially profit twice: once from the fund's high yield and again from the closing discount. Here's the important part: These discounts are on the road to recovery. And their 'discount momentum' positions us for gains, in addition to these three funds' double-digit payouts. You simply won't find such a profitable situation in the S&P 500. While the benchmark index has clawed its way back to around breakeven for 2025, the three funds we'll get into next are still lagging, and that's a gift for income investors like us. Let's get into them. Our first fund is the Nuveen Floating Rate Income Fund (JFR), with a 12.5% yield and a still-cheap valuation that's unlikely to stay that way for long. JFR Discount NAV As you can see above, JFR's discount plunged to within a hair of 12% when President Trump's tariffs were unveiled. That deal has since been cut nearly in half, to 6.7%. That might make you think it's too late to buy. Not at all—JFR's discount hasn't fully snapped back to where it was at the start of the year, so there's still upside here. And the discount will likely fade, because JFR has had a great run. With a 31% total return in the last three years, JFR is bound to attract more investor attention, putting those who front run that crowd now in a strong position to gain. JFR mainly invests in senior loans, as well as corporate bonds that are below investment grade, with a focus on floating-rate credit. You do need skilled management to navigate these waters, but Chicago-based Nuveen, which traces its roots back to 1898, is among the best in the business. Moreover, senior loans are repaid ahead of all other obligations in the event of a bankruptcy, which helps offset their risk. But that's not really an issue now, since corporate defaults are below their long-term average, despite the heavy markdown corporate bonds suffered in 2022, when investors thought they would see huge defaults. Since floating-rate loans (whose rates, as the name says, are linked to interest rates) still haven't fully recovered from that selloff, they're particularly compelling now, while default rates remain low. In all, JFR gives us a well-designed bond portfolio to diversify our holdings. The income and discount make the deal even sweeter. For something a bit more familiar, consider another Nuveen CEF: the Nuveen Multi-Asset Income Fund (NMAI). NMAI mixes investments in well-known stocks, like Microsoft (MSFT), JPMorgan Chase & Co. (JPM) and Apple (AAPL), with loans and bonds, resulting in a well-diversified portfolio that helps management cover the fund's 13.6% dividend. Again, this diversification has been attracting investors, causing NMAI's discount to dwindle. But we're still getting a generous 9% markdown here. Investors who buy NMAI's diversified portfolio get a big yield at a hefty markdown to the fund's actual value; this is partly why the fund's discount has been disappearing. This narrowing of the discount will likely continue, and good economic news could accelerate it, as we saw happen in June 2024 (the peak in the chart above). Let's wrap with a 'pure' stock fund packing a powerful 12.8% dividend: the abrdn Total Dynamic Dividend Fund (AOD). Like the two CEFs above, AOD is attracting more investment, which we can see happening in real time through its shrinking discount: AOD Discount NAV Still, AOD trades for far less than NAV, with a 9.7% discount that makes little sense given the fund's huge yield and large cap holdings, like Microsoft, Apple, Alphabet (GOOGL) and Tencent Holdings (TNCT). It also makes little sense for an investor to be able to get these stocks at such a big discount, which explains why that deal has been eroding. The bottom line here is that these 12%+ yielders are still catching up in the wake of April's panic, making them worth a look for those with extra cash to put to work. But their shrinking discounts show the crowd is catching on, so you'll need to act fast. Michael Foster is the Lead Research Analyst for Contrarian Outlook. For more great income ideas, click here for our latest report 'Indestructible Income: 5 Bargain Funds with Steady 8.6% Dividends.' Disclosure: none
The South African
2 days ago
- Business
- The South African
Mixed news for petrol price change this week
South African finance minister Enoch Godongwana recently announced inflation-based tax hikes, which will see petrol and diesel increase to R4.01c/l and R3.85c/l, respectively, effective from 4 June 2025. As a result, fuel taxes will be going up 15 cents per litre for diesel and 16 cents per litre for petrol, but there will still be a slight decline at the petrol pumps this week. According to month-end data from the Central Energy Fund (CEF), the fuel price balance remains positive thanks to a stronger rand and lower international oil prices. Without adding in the tax increase, these are the following projections: Petrol 93: decrease of 20 cents per litre decrease of 20 cents per litre Petrol 95: decrease of 20 cents per litre decrease of 20 cents per litre Diesel 0.05% (wholesale): decrease of 52 cents per litre decrease of 52 cents per litre Diesel 0.005% (wholesale): decrease of 52 cents per litre However, when factoring in the coming fuel levy increases, this is effectively the current projected outcome: 93: decrease of 4 cents per litre decrease of 4 cents per litre 95: decrease of 4 cents per litre decrease of 4 cents per litre Diesel 0.05% (wholesale): decrease of 37 cents per litre decrease of 37 cents per litre Diesel 0.005% (wholesale): decrease of 37 cents per litre The final overall price changes for both petrol and diesel will be confirmed early this month with the new prices taking effect at midnight on Tuesday, 3 June 2025. INLAND May Petrol 93 R21.29 Petrol 95 R21.40 Diesel 0.05% R18.90 Diesel 0.005% R18.94 Illuminating Paraffin R13.05 COASTAL May 93 R20.50 95 R20.61 Diesel 0.05% R18.11 Diesel 0.005% R18.18 Illuminating Paraffin R12.05 Let us know by leaving a comment below, or send a WhatsApp to 060 011 0211. Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
The South African
6 days ago
- Automotive
- The South African
Here's the latest fuel price forecast for June 2025
The latest data still suggests that good news lies ahead for South Africa's motorists NEXT WEEK . With under a week to go now until the new prices come into effect, there is expected to be welcome relief – especially for diesel vehicle owners. Vehicle owners in Mzansi saw a sizeable decrease in the cost of both petrol and diesel earlier this month. This was mainly due to a lower brent crude oil price and a stronger rand. Below, the latest projections as received by The South African website from the Central Energy Fund (CEF), effective Wednesday, 28 May. FUEL PRICE CHANGE Petrol 93 decrease of 20 cents Petrol 95 decrease of 20 cents Diesel 0.05% decrease of 51 cents Diesel 0.005% decrease of 51 cents Illuminating Paraffin decrease of 55 cents If the market conditions were to remain consistent for the remainder of the month – an unlikely scenario with the rand/dollar exchange rate fluctuating and the oil price ever changing – a decrease of 20 cents is expected for petrol 93 octane motorists and a decrease of 20 cents for 95 users. Meanwhile, diesel motorists would see something around a 51 cents per litre decrease. Finally, illuminating paraffin is expected to drop by 55 cents in price. FUEL PRICE IN SOUTH AFRICA IMPACTED BY TWO MAIN FACTORS: 1. The international price of petroleum products, driven mainly by oil prices 2. The rand/dollar exchange rate used in the purchase of these products Oil price At the time of publishing the brent crude oil price is $66.04 a barrel. Exchange rate At the time of publishing the rand/dollar exchange rate is R17.93/$. The final overall price changes for both petrol and diesel will be confirmed early next month with the new prices taking effect at midnight on Tuesday, 3 June 2025. Go easy on the accelerator until then, Mzansi. INLAND May Petrol 93 R21.29 Petrol 95 R21.40 Diesel 0.05% R18.90 Diesel 0.005% R18.94 Illuminating Paraffin R13.05 COASTAL May Petrol 93 R20.50 Petrol 95 R20.61 Diesel 0.05% R18.11 Diesel 0.005% R18.18 Illuminating Paraffin R12.05 Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
Business Insider
6 days ago
- Business
- Business Insider
Africa's richest country has about half of its oil-refining capacity shut
Roughly 49% of South Africa's refining capacity remains idle. Over the past five years, South Africa's refining capacity has been cut in half due to a combination of accidents and underinvestment. Nearly half of South Africa's refining capacity is currently idle. Domestic refining has declined due to accidents and underinvestment, halving capacity over five years. Imports now fulfill over 60% of the nation's fuel demand, projected at 15.5 million tons in 2025. Roughly 49% of South Africa's refining capacity remains idle. Over the past five years, South Africa's refining capacity has been cut in half due to a combination of accidents and underinvestment. As a result, the country now relies on imports to meet over 60% of its fuel demand, according to Transnet SOC Ltd., the state-owned logistics firm. In the first quarter of 2025 alone, South Africa imported 4.2 million tons of refined petroleum products, according to energy consultancy CITAC. For the full year, imports are projected to reach around 15.5 million tons, nearly double Kenya's estimated 8.9 million tons and significantly more than Nigeria's 6.4 million tons. Oil refineries shut This import is needed because a bunch of South Africa's main refineries have been down, per a Bloomberg report. Sapref, the country's largest refinery, owned by the Central Energy Fund (CEF), is shut, taking 180,000 barrels per day out of production. Engen's plant, which pumps out 120,000 barrels daily and is now owned by Vitol, is also shut. Meanwhile, Sasol's Natref facility, with a daily output of 108,000 barrels, is down due to an outage. Plus, PetroSA's gas-to-liquid plant, also run by the CEF, has stopped working, taking another 45,000 barrels a day out of the picture. Currently, only two refineries remain operational, Sasol's Secunda plant, which produces 150,000 barrels per day from coal and gas, and Glencore's Astron refinery, which contributes 100,000 barrels per day. Combined, these account for less than half of the country's former refining capacity. In a bid to rebuild domestic refining, the South African government last year acquired the shuttered Sapref facility from Shell Plc and BP Plc. With local production constrained, the country is increasingly turning to global fuel traders to meet demand.
The South African
7 days ago
- Automotive
- The South African
Here's the petrol price forecast for June 2025
The latest available data still suggests that good news lies ahead for South Africa's motorists NEXT WEEK . With a week to go until the new prices come into effect, there is expected to be welcome relief – especially for diesel vehicle owners. Vehicle owners in Mzansi saw a sizeable decrease in the cost of both petrol and diesel earlier this month. This was mainly due to a lower brent crude oil price and a stronger rand. Below, the latest projections as received by The South African website from the Central Energy Fund (CEF), effective Tuesday, 27 May. FUEL PRICE CHANGE Petrol 93 decrease of 19 cents Petrol 95 decrease of 19 cents Diesel 0.05% decrease of 51 cents Diesel 0.005% decrease of 51 cents Illuminating Paraffin decrease of 55 cents If the market conditions were to remain consistent for the remainder of the month – an unlikely scenario with the rand/dollar exchange rate fluctuating and the oil price ever changing – a decrease of 19 cents is expected for petrol 93 octane motorists and a decrease of 19 cents for 95 users. Meanwhile, diesel motorists would see something around a 51 cents per litre decrease. Finally, illuminating paraffin is expected to drop by 55 cents in price. FUEL PRICE IN SOUTH AFRICA IMPACTED BY TWO MAIN FACTORS: 1. The international price of petroleum products, driven mainly by oil prices 2. The rand/dollar exchange rate used in the purchase of these products Oil price At the time of publishing the brent crude oil price is $64.39 a barrel. Exchange rate At the time of publishing the rand/dollar exchange rate is R17.93/$. The final overall price changes for both petrol and diesel will be confirmed early next month with the new prices taking effect at midnight on Tuesday, 3 June 2025. Go easy on the accelerator until then, Mzansi. INLAND May Petrol 93 R21.29 Petrol 95 R21.40 Diesel 0.05% R18.90 Diesel 0.005% R18.94 Illuminating Paraffin R13.05 COASTAL May Petrol 93 R20.50 Petrol 95 R20.61 Diesel 0.05% R18.11 Diesel 0.005% R18.18 Illuminating Paraffin R12.05 Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
