Final NAV 31 Jan 2007

RNS Number:1682S
Dexion Trading Limited
01 March 2007

Dexion Trading Limited ("the Company")

January Net Asset Value

The net asset value per # share as of 31 January 2007 was 110.05 pence.

This valuation, which has been prepared in good faith by the Company's
investment manager, is based principally on formal valuations supplied to the
Company by the administrators of the Company's underlying investments. In the
case of 4 of the Company's 22 investments, where no such formal valuation has
been received by today's date, an estimated valuation prepared by the Company's
investment advisor or by the manager or administrator of the underlying funds
has been used. Such valuations or estimates are unaudited and may not comply
with generally accepted accounting or valuation principles.

Manager's Report

Performance Review

Dexion Trading returned +1.21% in January (ytd +1.21%).

January saw a continuation of many trends established towards the end of last
year as the "Goldilocks" scenario of sustainable growth with low inflation
dominated investor sentiment. Weakening in the prices of industrial commodities
and energy supported this view. The oil price dropped from USD60 to a low of
almost USD50 per barrel before returning back to USD57 when President Bush
announced that he would double the size of the US strategic reserve. Bond
markets sold off across the curve in the US and Europe as the prospect of
interest rate cuts receded. The UK gilt market was particularly hard hit by the
unexpected BoE 0.25% rate rise. The JGB market saw a relief rally at the short
end of the curve as the BoJ failed to deliver an anticipated 0.25% hike, while
the Yen sold down heavily as rates increased the attractiveness of the carry
trade. Equity markets benefited from global bond weakness and delivered modest
returns with significant intra-month volatility. Markets were driven higher in
the US and Europe by corporate activity rather than by steady buying pressure.
Emerging market equities delivered lackluster returns partly due to the
following reasons: a) the Chinese government hinted that a speculative bubble
had formed in China and sought to prevent local investors buying on margin, and
b) a sell-off in commodities held back equities in Latin America and Russia.
Emerging market debt indices barely moved during the month, spreads widening
only slightly.

January was a relatively good month across the portfolio with all the strategy
components ending in positive territory. Return generators varied by sector, but
generally the portfolio profited from the continued out-performance of risk
assets. Being long equities was a dominant theme for both Discretionary and
Systematic managers as, with one or two exceptions, global stock markets
performed well. Long-term Systematic Trading benefited from the rally in G3
equities, while the Discretionary Trading managers had a greater focus on
emerging market opportunities. Only one manager lost money in equities, due to
intra-month volatility rather than a contrarian short position. Fixed income
provided an opportunity for further profits; here, Systematic, RV Macro and to a
lesser extent Discretionary managers all benefited from the continued sell-off
in G3 fixed income, with positions concentrated in the US and to a lesser extent
the Eurozone. This move was largely anticipated by our trading managers who have
generally been more hawkish than the market with respect to expectations of
future monetary policy, particularly in the US. In developing markets, fixed
income returns were mixed. Emerging market investors were cautious, resulting in
mixed performance across asset classes; equities performed well, fixed income
markets generally underperformed and currencies weakened. Our managers remain
largely bullish emerging markets and profits depended on exposure to a few
trades that continued uninterrupted, including long Brazilian and Turkish fixed
income. Foreign exchange provided a small net positive contribution to the
portfolio performance over the month. While Systematic Trading profited from
short Yen positions, Discretionary managers had small losses from short US
Dollar exposure arising from bullish views of other currencies rather than an
explicit bearish stance on the US Dollar. At the sub-sector level, the best
contributing sector was once again Systematic Trading, which added around +92bp
to gross performance, followed by Relative Value Arbitrage (+20bp),
Discretionary Trading (+18bp), RV Macro (+17bp) and lastly Multi-Process (+7bp).

Strategy Allocation as Number of Performance by
of 1 February Funds as of Strategy
% 1 February %
January YTD
Directional - Discretionary and RV Macro 43 8 0.78 0.78
Directional - Systematic Trading 37 9 2.69 2.69
Multi-Process 10 3 0.69 0.69
Relative Value Arbitrage 10 2 2.08 2.08
Total 100 22

Strategy returns are in US$ and net of underlying manager fees only, and not
inclusive of Dexion Trading's fees and expenses.

Outlook

Discretionary traders generally maintained a bullish long-term view for risk
assets coming into February. However, many feel that markets are probably
overdue a short-term technical correction. Consequently, risk levels remain
relatively low and managers are cautious. At the beginning of February,
systematic managers remained short both the long and front end of the US and
European curves, kept an overall long bias to the Japanese curve while running
short Yen and crude oil positions. Short Yen positions look increasingly
vulnerable as Yen carry trades have become somewhat crowded. Short crude
positions may be impacted by the late arrival of cold winter weather in US and
Europe. Event arbitrage managers had a promising start to 2007 where Europe
remained an area of focus. Globally, deals continue to be completed and
transaction volume remains at high levels. We believe that the opportunity set
should continue to be fertile as M&A and LBO activity look set to remain strong
going forward.

Investment Policy

The Company's investment policy is to invest in an actively managed portfolio of
hedge funds which is diversified by investment strategy, style and manager. The
Company does not invest in other UK listed investment companies (including UK
listed investment trusts).

Voting Rights and Capital

The Company's capital consists of 83,000,000 ordinary shares with voting rights.
Therefore, the total number of voting rights in the Company is 83,000,000.

The above figure (83,000,000) may be used by shareholders as the denominator for
the calculations by which they will determine if they are required to notify
their interest in, or a change to their interest in the Company under the FSA's
Disclosure and Transparency Rules.

This information is provided by RNS
The company news service from the London Stock Exchange
END

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