REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

17/06/2024 14:00

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RNS Number : 7442S  Utilico Emerging Markets Trust PLC  17 June 2024

17 June 2024

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 eased by 0.3% in May, a narrower decline than the MSCI
Emerging Markets total return Index ("MSCI") which was down by 1.2% in
Sterling terms in the month. This takes UEM's NAV total return performance
since 31 March 2024 down 0.3%, slightly trailing the MSCI which was up 0.1% in
Sterling terms over the same period.

 

Global stock markets were mixed in May, as inflation in many jurisdictions
proved more stubborn than previously expected. In the US the Federal Reserve
kept rates on hold, notwithstanding which the S&P 500 Index strengthened
by 4.8% as consumer spending held up and the rally in AI stocks continued.
European markets were more benign, but also posted positive performances with
the Eurostoxx and FTSE 100 up 1.3% and 1.6% respectively over the month.

 

In emerging markets, pre-election jitters saw the India Sensex ease by 0.3%
and the Mexico Bolsa IPC decline by 2.7%, though both remain close to all-time
highs. India GDP growth again exceeded expectations, coming in at 7.8% in the
quarter ended March 2024. In Brazil, the Bovespa Index fell by 3.0% after the
Central Bank slowed its pace of interest rate cuts to 25bps, citing concerns
over the inflation outlook. Sentiment here was negatively compounded by
President Lula's decision to replace the CEO of state-owned oil company
Petrobras and the prospect of weakening fiscal targets.

 

In China, manufacturing activity unexpectedly contracted in May with the
manufacturing PMI declining to 49.5 from 50.4 in April. The Hong Kong Hang
Seng Index was up 1.8% while the Shanghai Composite Index declined by 0.6%
over the month. Markets in the Philippines and Indonesia were also weak, with
the PSEi Index and Jakarta Stock Exchange Index down 4.0% and 3.6%
respectively. The outlier for the region was Vietnam, where the Ho Chi Minh
Index was up 4.3% despite net selling by foreigners and the dismissals of
several high-ranking officials in the country.

 

Sterling strengthened against most currencies in May, up 3.1% versus the
Brazilian Real, 1.7% against the Indian Rupee and the Chinese Renminbi, and
2.1% against the Vietnamese Dong. Sterling was broadly flat against the Euro
and up 1.7% versus the US Dollar.

 

 

PORTFOLIO

There was one change to the top holdings, with China Datang Renewable Power
re-entering the top thirty, replacing Petalite on relative performance. China
Datang Renewable's share price was up 13.9% in May, recovering from depressed
levels. Meanwhile, the valuation of UEM's investment in Petalite was reduced
by £1.6m in May to reflect feedback from the ongoing Series A fund raise.

 

In the Philippines, Manila Water's share price was up 8.7% over the month
after posting robust Q1 results with EBITDA up 29.5% year-on-year on the back
of tariff increases and volume growth. ICT's share price was up 2.7%,
consolidating gains close to all-time highs. In Vietnam, there was a strong
performance in FPT shares, up 9.2% helped by the improvement in local
sentiment. UEM's investments in China were mixed, with Kunlun Energy up 6.4%
but Shanghai International Airport down 7.7%. In Korea, KINX's share price
fell by 13.1% as the commissioning of its new datacentre faced minor delays.
UEM's investments in India were broadly flat.

 

In Brazil, most investments were down in May, with Santos shares falling by
15.2% notwithstanding stellar results with Q1 EBITDA more than doubling and
April volumes still showing robust growth. JSL's share price was down 9.9% and
Ocean Wilsons declined by 8.4%, while Sabesp decreased by 8.6% over
uncertainty around the regulatory parameters ahead of its imminent
privatisation. More resilient performances were delivered by Orizon up 5.2%,
Alupar up 4.3% and Serena Energia up 4.7%.

 

In Central and Eastern Europe, it was pleasing to see Inpost shares climb by
9.2% following strong Q1 figures which saw an acceleration in Polish volumes
and encouraging progress in the UK, with group EBITDA up 36%. TAV's share
price was also up, rising by 9.5% over the month.

 

Portfolio purchases amounted to £6.9m and realisations totalled £14.9m.

 

DEBT

UEM's debt remained at nil in the month. Discussions for a replacement bank
facility are continuing.

 

OTHER

UEM's share price was unchanged over the month at 226.00p. The discount to NAV
narrowed to 17.2% from 17.5%. UEM bought back 0.7m shares at an average price
of 231.15p in the month, taking the total shares bought back in the two months
to 31 May 2024 to 1.3m, equivalent to 0.7% of the share capital as at 31 March
2024.

 

A fourth quarterly interim dividend of 2.15p per ordinary share in respect of
the year ended 31 March 2024 was declared and will be paid on 28 June 2024 to
shareholders on the register on 7 June 2024.

 

ICM TEAM

After over ten years as a valued UEM investment team member, Jon Groocock is
leaving ICM to seek new opportunities. All of us at ICM wish Jon every success
in the future.

 

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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