REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

17/02/2023 13:00

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RNS Number : 3315Q  Utilico Emerging Markets Trust PLC  17 February 2023

17 February 2023

UTILICO EMERGING MARKETS TRUST PLC

(LEI Number: 2138005TJMCWR2394O39)

 

Publication of monthly factsheet

 

The latest monthly factsheet for Utilico Emerging Markets Trust plc ("UEM" or
the "Company") will shortly be available through the Company's website at:

https://www.uemtrust.co.uk/investor-relations/factsheet-archive
(https://www.uemtrust.co.uk/investor-relations/factsheet-archive)

 

Monthly commentary

 

PERFORMANCE

UEM's NAV total return increased by 4.1% in January, which was behind the MSCI
Emerging Markets total return Index which was up by 5.9% in Sterling terms for
the period.

 

Markets were mostly upbeat in January, helped by improved sentiment on China's
re-opening and indications that inflation was easing across many major
economies. In the US headline CPI fell to 6.5% from 7.1%, with the Federal
Bank hinting at a nearing of the end of the rate increase cycle, helping
propel the S&P 500 Index which was up by 6.2% in the month. European
markets were even stronger, with the Eurostoxx up 9.7% as the Eurozone PMI hit
a seven-month high.

 

EM benefitted from the risk-on environment. In China the manufacturing PMI
surprised positively at 50.1 in January, up from 47.0 in December 2022,
hitting expansionary territory after four months of sequential contraction.
The service sector also jumped, as several large cities announced that Covid
virus caseloads had peaked mid-month, prompting many to travel and socialise
in the Lunar New Year celebrations. According to the Ministry of Culture and
Tourism spending during the holiday recovered by 30% from a year ago. Hong
Kong's Hang Seng Index was up 10.4% and the Shanghai Composite rose by 5.4% in
January.

 

In Brazil, President Lula unsettled markets with statements on enhancing
social programs, loosening the fiscal regime and inflation targets, and
questioning the independence of the Central Bank. Bolsanaro-supporting
protesters stormed the Congress in the country's capital. Against this
turbulent backdrop, the Bovespa still managed a 3.4% gain. Meanwhile, the
markets in Mexico, Vietnam and Korea performed strongly, with the Mexico Bolsa
up 12.6%, the Ho Chi Minh Index up 10.3%, and the Kospi up 8.4%.

 

Indian markets notably underperformed, with the Sensex falling 2.1% in
January. This was mainly due to the release of a short-sellers research report
into the Adani group companies, alleging share price manipulation and
accounting fraud. At the time of the report UEM's only direct exposure to an
Adani entity was a small position in Adani Ports which has subsequently been
exited.

 

Sterling was mixed, strengthening 2.3% against the US Dollar and 1.4% versus
the Indian Rupee, but weakening 1.3% against the Brazilian Real, 4.0% versus
the Chilean Peso, and 1.3% against the Mexican Peso.

 

PORTFOLIO

The majority of investments in UEM's portfolio posted share price increases
during January, with one change to the top thirty as Vamos re-entered as its
share price rose by 15.7%, replacing TAV. In Brazil there were robust share
price performances for Santos, up 12.9%, and Orizon, up 14.4%, recovering off
of recent lows. UEM's Mexican airport investments appreciated strongly, with
OMA and GAP's share prices up 14.9% and 16.1% respectively. Both companies
posted continued strong recoveries in passenger numbers, with GAP guiding for
double-digit revenue and EBITDA growth in 2023.

 

Elsewhere, notable performances were delivered by China Datang Renewables,
with its share price up by 11.7%, Kunlun Energy up 11.0%, and KINX up 16.1%.
It was pleasing to see Inpost continue to deliver good results, beating
consensus with volumes up 23% in Q4. Inpost's share price was up by 12.2% over
the month.

 

Modest positive share price movements were seen elsewhere, with FPT up 8.9%,
China Gas up 7.0%, MyEG up 5.8% and CITIC Telecom up 5.3%. Only five
investments in the top thirty saw share price declines, all of which were
comparatively modest - as evidenced by the worst performance being Telelink,
down by 2.2%.

 

During January, purchases for the portfolio totalled £5.8m and realisations
totalled £14.9m.

 

DEBT

UEM's bank debt declined from £26.1m to £25.2m and was drawn as EUR 12.0m
and USD 18.0m.

 

OTHER

UEM's share price ended January at 216.00p, up 3.3% over the month. The
discount to NAV widened slightly to 14.0% from 13.3%. UEM bought back 75,000
shares at a price of 219.00p in the month.

 

 

Name of contact and telephone number for enquiries:

ICM Investment Management
Limited
+44(0)1372 271486

Charles Jillings / Alastair Moreton

 

Montfort Communications

Gay Collins, Pippa
Bailey
+44(0)20 3770 7913

utilico@montfort.london

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