Ann: Announcement of buy-back - Appendix 3C, page-4

In theory buy-backs should reduce discounts to NTA. In practice I'm not so sure this is the case eg. ALF. MA1. Often when announced buy-backs give a short term reduction, but it then drifts back to where it was. Perhaps in the medium term buy-backs just stops the discount getting larger.

As many managers tout reduced costs per share as a reason for share or option issues, is it a good idea to make a relatively small LIC smaller? One could also conjecture that, with NTA below IPO price, introducing a buyback is an unstated admission that management has done a poor job of selecting other company shares in the past and/or won't be able to find suitable shares to buy in the near future. When MFF were trading at a substantial discount to NTA some called for a buy-back. MFF's response was that they could find better value elsewhere.