- Summary:
- The Scottish Mortgage share price has come under pressure in the past two weeks, which has seen its value dropping by 8 per cent.
The Scottish Mortgage share price has come under pressure in the past two weeks, which has seen its value dropping by 8 per cent. In the past few weeks, the company has aggressively reduced its risk exposure by slashing its investments in tech giants such as Alibaba and Tencent.
It has also eased up on its exposure to US big tech in recent years but has remained active in investing in emerging technologies which, due to the current downturn, are not performing particularly well.
For instance, recent data from the trust’s portfolio of 52 unlisted companies, which accounted for over 30 per cent of its assets, endured a series of problems, including write-downs, in the first half of this year. With the economic conditions worsening since then, it is likely that these companies are still negatively impacting the company’s financial health.
The current Scottish Mortgage share drop also comes amidst reports that the company’s net asset value had dropped by 15 per cent since the end of March following a slide in the value of most of the assets the company was holding. Their recent increase of dividends by 5 per cent has also not stopped the current bearish trend.
Scottish Mortgage Share Price Forecast
As seen from the fundamental analysis above, most of the Scottish Mortgage problems are beyond its control. This includes the recent drop in their net asset value, which is currently outpacing the FTSE 100 average of 7 per cent.
Therefore, I expect the Scottish Mortgage share price to continue dropping for the next few trading sessions. There is a high likelihood that we might see Scottish Mortgage share price trading below the 700p price level and, in the long-term, hitting the 670p demand level. However, should the prices reverse and trade above the 800p psychological level, then my bearish analysis will be invalidated.
SMT Daily Chart
