REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

15/05/2023 12:00

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RNS Number : 4385Z  Utilico Emerging Markets Trust PLC  15 May 2023

15 May 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 0.9% in April, outperforming the MSCI
Emerging Markets total return Index which was down by 2.9% in Sterling terms.

 

In April, the markets continued to be mixed. The US, Europe and the UK
witnessed modest gains, on the back of more resilient economic data as the
S&P 500 was up by 1.5%, the Eurostoxx was up by 1.0% and the FTSE 100 was
up by 3.1%. However positive investment sentiment was tapered as the Federal
Reserve continued to indicate that the rolling over of interest rates is
unlikely to happen this year and economic growth is likely to soften. Cracks
within the banking sector also continued to appear as the banking crisis of
2023 claimed its largest US victim to date as the First Republic Bank
collapsed.

 

China was one of the worst performing markets in April, with the Hang Seng
down by 2.5%. This was despite reporting strong export data of 14.8% and low
inflation of CPI of +0.7% for March, as well as better than expected 1Q23 GDP
growth of 4.5%. Ongoing US-China tensions continued to weigh on market
sentiment and comments from the Politburo meeting at the end of the month
raised concerns about the government's plans to support economic growth.
Thailand also saw negative returns for the month, down by 5.0% as investors
removed some risk before the upcoming elections in mid-May. Indonesia and
India however performed well up by 1.6% and 4.1% respectively, with Indonesia
announcing intentions to focus on becoming a global player of nickel, tapping
into the EV market, whilst India's central bank surprised the market by
keeping interest rate unchanged for the month on the back of more positive
macro data.

 

Latam also saw positive performance in April, with the Bovespa Index up by
2.5%, the Chilean IPSA up 1.7% and the Mexican Mexbol Index up by 2.3%. The
Bovespa's outperformance was driven by a combination of factors, including the
unveiling of the long-awaited fiscal framework which introduced a cap on
public expenditure growth based on accumulated revenues, and the presence of
inflation below expectations. Both factors are increasing the possibility of
potential monetary easing in 2H23. The positive performance of the Chile Index
was driven by the banking and sanitation sectors, which have been bolstered by
increased foreign inflows and a reduced perception of regulatory risk.

 

During April, Sterling broadly strengthened against most currencies,
appreciating by 1.7% against the US Dollar and 2.5% against the Chinese
Renminbi. Sterling was flat against the Euro and marginally depreciated
against the Indonesian Rupee and Romanian Leu by 0.5% and 0.3% respectively.

 

PORTFOLIO

UEM's portfolio had a mixed performance in April. There was one change to the
top thirty, with Bolsa de Valores de Colombia ("BVC") replacing Grupo Traxion.
BVC is the Colombian Stock Exchange, and the share price was up by 7.4% during
April. There has been heightened investor interest in BVC, driven by positive
developments regarding the merger of the Colombian, Chilean, and Peruvian
exchanges, as well as a decrease in the local market's risk premium, which was
attributed to the Colombian Congress's indications of checks-and-balances to
restrain President Petro's more radical policies.

 

UEM's portfolio witnessed some strong performances in April with Umeme's share
price up by 22.4%, still benefiting from the strong results and dividend
announced in March. Kunlun Energy was up by 18.3%, as it also announced solid
FY22 results with EPS up 30.0%. Inpost's share price increased in April by
14.8% and Gujarat State Petronet was up by 8.4% as the Gujarat state
government announced minimum pay-outs from SOEs which should see a significant
step-up in dividends and potentially buybacks going forwards.

 

Negative share price performances were witnessed by Kinx, down by 11.3%, and
by GAP which was down by 9.0% despite solid 1Q23 results as a newly proposed
concession bill in Mexico has created uncertainty around GAP's airport
concession.

 

During April, purchases for the portfolio amounted to £6.3m and realisations
totalled £8.5m.

 

DEBT

UEM's bank debt increased from £35.1m to £36.4m and was drawn as USD 20.0m,
EUR 12.0m and GBP 10.0m.

 

OTHER

UEM's share price ended April at 220.00p, up 1.4%. The discount to NAV
narrowed slightly to 13.1% from 13.5%. UEM bought back 100,000 shares at an
average price of 216.91p 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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