microcap investment portfolio value down 23pc

Sydney - Wednesday - Oct 22: (RWE Australian Business News) -
Contango MicroCap Ltd (ASX:CTN) today reported the value of its
investment portfolio declined 22.6pc over the September quarter as a
lack of liquidity in the microcap market caused prices to drop.
"Major global equity markets fell sharply over the September
quarter with Asian markets showing particularly large falls.
"The flight from less liquid assets saw small and microcap
stocks sold down aggressively," chairman Mr David Stevens said.
The All Ordinaries Accumulation Index fell 11.9pc over the
quarter, compared with a fall of 18.1pc for the Small Ordinaries
Accumulation Index.
Contango MicroCap paid a 4c fully franked final dividend on
September 12.
The after-tax NTA at September 30 was $1.322 per share, compared
with $1.640 on June 30. After adjusting for the dividend paid in
September, the after-tax NTA decreased by 17.0pc over the quarter.
Over the year to September 30, after-tax NTA declined 23.2pc
(after adjusting for all dividends and the rights issue). This compares
with a decline of 34.5pc for the Small Ordinaries Accumulation Index
over the year to September.

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On outlook, Mr Stevens said the slowing growth environment had
led to sharp falls in commodity prices and had made a negative impact on
the prices of resource stocks.
"The International Monetary Fund expects global growth to weaken
in 2009, but to return to trend levels in 2010. Supply growth for a
range of commodities is likely to remain subdued for some time to come.
"Against this background, commodity prices are expected to
remain under pressure in coming months, but to strengthen as global
growth recovers.
"We have significantly reduced the exposure of the company's
investment portfolio to resource stocks and increased the weighting to
defensive industrial stocks. In these difficult economic times, we have
also increased the portfolio's cash holding," he said.
"Over the coming year, the Australian economy will emerge as one
of the strongest in the developed world.
"Microcap companies have been sold off very aggressively and are
now trading on historically low multiples. As liquidity returns to our
market, we expect many of these microcap companies to rebound.
"These have been exceedingly difficult times but we remain
confident about the long-term outlook for innovative, high-growth
microcap companies," Mr Stevens said.