REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

12/08/2024 10:30

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RNS Number : 0844A  Utilico Emerging Markets Trust PLC  12 August 2024

12 August 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 was down 1.2% in July, performing in line with the MSCI
Emerging Markets total return Index which was also down 1.2% in Sterling terms
in the month.

 

Global markets in July remained mixed, with pressure increasing on the US
Federal Reserve to cut interest rates in September on the back of softer
inflationary and labour market data. Headline inflation in the US fell to 3.0%
YoY, the second consecutive month of being lower than expected and the US
unemployment rate rose to 4.1% indicating a slowing labour market. The
attempted assassination of Donald Trump, and the withdrawal of President Biden
from the US presidential race, leading to the endorsement of his vice
president Kamila Harris, added to the market volatility. In July the S&P
Index was up by 1.1% whilst the Nasdaq Composite Index struggled being down by
0.75%, affected by concerns around whether big tech stocks can deliver on
their heavy AI investments, and the US Dollar weakened depreciating 1.6%
against Sterling.

 

Emerging markets fared better in July, helped by the weaker US Dollar and
expected interest rate cuts. Within Asia, the Indian Sensex Index increased
again in July by 3.4% as investors reacted positively to the new Modi
coalition government continuing their focus on reformist policies as
reiterated in the Indian Budget. The Philippines PSEi Index was also up 3.2%
and the Indonesian JCI Index was up by 2.7%. China continues to be the drag,
with the Chinese Shanghai Composite Index down by 1.0% and the Hong Kong Hang
Seng Index down 2.1% as the third plenum failed to excite investment
sentiment. Although there was no announcement of material stimulus to support
Chinese growth, the Chinese government has implemented measures to support the
financial systems such as cutting the reverse repo rate.

 

Within Latam, market performance was also mixed with the Brazilian Bovespa up
by 3.0% helped by the prospect of US interest rates cuts. Combined with low
local valuations which attracted foreign investors once again, this resulted
in the first monthly inflow this year. The Mexican market was up by 1.2%
whilst the Colombian market was down by 2.6%. Exchange rates for the Latam
markets continues to be a struggle with the Brazilian Real depreciating 3.3%
against Sterling and the Mexican Peso depreciating 3.4% over the month.

 

PORTFOLIO

There was only one change to the top thirty holdings during July. Pertamina
Geothermal Energy replaced Vietnam Holdings on the back of share price
performance. Pertamina is an Indonesian listed wholly renewable company in the
geothermal space with 672MW of capacity looking to increase this to at least
1GW by 2026. UEM invested at IPO and has increased its position since.

 

There were mixed performances in the portfolio in July. Sabesp, the Sao Paulo
based, Brazilian water and sanitation company witnessed the strongest
performance for the month up by 17.8% on the back of its successful
privatisation. The Sao Paulo state government reduced its holding from 50.3%
to 18.0%, with Equatorial Energia acquiring a 15.0% interest in Sabesp and
becoming the operating partner. Orizon, the Brazilian waste management company
was up by 10.8% over the month supported by the announcement of a new
biomethane supply contract with Compass. Aguas Andinas, the Chilean listed
water and waste company was also up by 7.4% recovering from June's sell off.

 

Citic Telecom, the Chinese telecom operator saw its share price in July fall
by 21.0% after it issued a profit warning ahead of its 1H24 results expected
to be released in August, whilst Kinx was down by 10.1% as it is awaiting
completion of a new data centre which is now expected to be completed in
August rather than the end of July. Umeme was down by 5.4% and Santos Brasil
was down by 3.9%.

 

Portfolio purchases amounted to £5.0m and total realisations were £5.6m.

 

DEBT

UEM's debt remained at nil in July and discussions for a replacement bank
facility are continuing.

 

OTHER

UEM's share price for the month was up 0.9% ending July at 223.00p. The
discount to NAV narrowed to 16.9% from 18.6% in June. UEM bought back 0.4m
shares at an average price of 222.96p in the month, taking the total shares
bought back in the four months to 31 July 2024 to 2.2m, equivalent to 1.1% of
the share capital as at 31 March 2024.

 

 

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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