REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

13/09/2023 10:30

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RNS Number : 3178M  Utilico Emerging Markets Trust PLC  13 September 2023

13 September 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 decreased by 4.0% in August, this decline was smaller
than that of the MSCI EM total return Index ("MSCI") which was down by 4.7% in
Sterling terms. Year to date, UEM's NAV total return has increased by 8.7% and
significantly outperforming the MSCI, which was down by 0.1% in Sterling terms
over the same period.

 

After strong performance in June and July, equity markets were mostly weaker
in August, reacting to mixed economic statistics that add uncertainty to the
market outlook. In the US, consumer and government spending remains strong,
but the housing market has stalled, and the number of job vacancies continue
to decline. Following July's rate increase, analysts expect one final rate
rise this year from the Federal Reserve, but probably not at September's
meeting. The Bank of England raised rates by 25bps during the month, following
the European Central Bank's similar rate rise at the end of July. The S&P
500 declined by 1.8%, the FTSE 100 declined by 3.4% and the Eurostoxx Index
was down by 3.9%.

 

In China, market confidence remains low and international investors continue
to reduce their exposure to the country. Weakness in the housing market,
concerns over real estate developers' debt and slowing factory activity all
weighed on stocks. China has cut interest rates and reduced deposit
requirements for real estate in an attempt to stimulate the housing market.
China's consumer price index in August was back in positive territory, albeit
up just 0.1% following the deflationary decline of 0.3% in July. The Hang Seng
Index declined by 8.5% in August and the Shanghai Composite fell by 5.2%.

 

Many other emerging markets were weaker in August, with industrial commodity
prices declining on the weak Chinese outlook. Latin American markets followed
the lead of US markets, with Brazil's Bovespa Index decreasing by 5.1%,
Chile's IPSA Index down by 6.0% and Mexico's Bolsa Index down by 3.3%. In
Asia, most markets also declined with India's SENSEX Index down by 2.5% and
the PSEi Index in the Philippines decreased by 6.3%. There was however a 0.1%
gain in Vietnam's Ho Chi Minh Index and the Jakarta Stock Exchange increased
by 0.3%.

 

In the currency markets, the US Dollar strengthened against most currencies
whilst Sterling had a mixed performance. Sterling declined 1.5% against the US
Dollar but was flat against the Euro. The Brazilian Real fell by 2.4% against
Sterling and the Chinese Renminbi was down by 0.5% but in contrast, the Indian
Rupee was stronger by 0.9% and Mexican Peso advanced by 0.8%.

 

PORTFOLIO

There were two changes to the top thirty holdings. Telelink Business Services
re-entered the top thirty and a fairly new holding, Pertamina Geothermal
Energy, replaced Conversant and Bolsa de Valores Colombia on relative
performance.

 

Pertamina Geothermal Energy, which listed on the Indonesian Stock Exchange in
February is an Indonesian electricity generator using geothermal steam.
Pertamina's share price surged 62.7% during August as the market reacted
positively to its second quarter results.

 

Only four of the top thirty companies saw their stock prices rise in August.
Pertamina Geothermal led the risers with its gain of 62.7%. FPT Corporation
had another strong month, with its share price rising by 13.8%, Korean
Internet Neutral Exchange's share price gained 6.2% on solid Q2 results and
TTS Transport Trade Services' share price continued to rise, gaining 4.5% in
August.

 

Twenty-three companies reported declines in stock prices in August and five of
these declined by more than 10%, namely China Datang Renewable Power, which
declined by 23.0%, Grupo Traxion, down by 13.4% and Brazilian companies, Omega
Energia, Electrobras and Santos Port which declined by 13.7%, 11.1% and 10.7%
respectively.

 

Realisations of £12.2m significantly outweighed purchases of £4.6m during
August.

 

DEBT

UEM repaid USD 10.0m on its debt facility during the month. Bank debt
therefore decreased from £21.2m to £13.5m and was drawn as GBP 7.5m and EUR
7.0m.

OTHER

UEM's share price ended August at 220.00p, down 4.3% in the month. The
discount to NAV narrowed to 13.9% from 14.4%. UEM bought back 1.3m shares at
an average price of 220.65p in the month.

 

A first quarterly interim dividend of 2.15p per ordinary share in respect of
the year ending 31 March 2024, was declared in August which will be paid on 22
September 2023 to shareholders on the register on 1 September 2023.

 

 

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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