REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

10/12/2024 07:00

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RNS Number : 3948P  Utilico Emerging Markets Trust PLC  10 December 2024

10 December 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 in November by 2.3% outperforming the MSCI
Emerging Markets total return Index which was down by 2.6% in Sterling terms
during the month.

 

Global markets in November were dominated by one thing, the US election with
the Republicans winning the White House and the Senate. The US market reacted
positively given President Trump now has robust electoral bases to implement
his policies of trade, taxes, immigration and deregulation, with the focus
being primarily on improving the domestic economy. The S&P 500 Index
subsequently reached an all-time high during the month, up by 5.7%, whilst the
Dow Jones Industrial Average Index was up by 7.5% and the US Dollar
appreciated against Sterling by 1.1%.

 

However uncertainty remained in the global markets with regards to how
expansionary Trump's fiscal policy will be, at a time when inflation remains
elevated. This resulted in the US Federal Reserve signalling a more cautious
path for interest rate reductions. Further uncertainty remained over what the
magnitude of Trump's potential trade tariffs could be, especially with regards
to China where Trump has threatened up to 60% tariffs on imports. The Hong
Kong Hang Seng Index was subsequently down by 4.4%, now having surrendered a
large part of the gains witnessed in early autumn that arose on the back of
promised stimulus that has failed to materialise. All eyes are now focused on
the mid December Economic Work Conference for further stimulus to boost
private consumption. Nevertheless, the Shanghai Composite was up 1.4% for the
month as the Index has more domestic investors.

 

With the prospects of a more buoyant US market, a stronger US Dollar, a
tighter Federal policy as well as higher tariffs, other emerging markets also
came under pressure as many witnessed outflows from foreign investors. Within
Asean, Indonesia was down by 6.1% as it has a higher exposure to foreign
investors, whilst the Philippines was down by 7.4%. Vietnam was down by 1.1%
also affected by additional uncertainty surrounding proposed tariffs. India,
despite having a lower exposure to the US, was also down marginally by 0.3% as
it saw an improvement at the end of the month on the back of President Modi's
BJP party winning a key state election of Maharashtra.

 

In Latam, Mexico continued to see pressure, with the Mexbol Index down by 1.7%
as Trump's threat of tariffs continues to be an overhang. The Brazilian
Boverspa was also down by 3.1% as the long awaited fiscal package to better
balance the country's fiscal accounts was weaker than expected. As a result,
the Brazilian Real depreciated against Sterling by 1.9% with expectations of a
rise in the SELIC interest rate will likely be required on the back of
potentially higher inflationary pressures. Argentina was the shining light in
Latam during the month, with the Merval Index up by 22.2% on the back of
continued positive sentiment tied to President Milei's policies and early
indications of economic improvement, further bolstered by Trump's support.
Within EMEA, Turkey was also up by 8.9% recovering some of the ground lost
earlier in the year.

 

PORTFOLIO

There was one change to the top thirty holdings in November. Piraeus Port
Authority ("PPA") replaced Terna Energy. PPA is listed on the Athens Stock
Exchange and owns the concession for Piraeus Port in Greece, operating
container, cruise, coastal and car terminals and is 67% owned by Cosco
Shipping Ports. In FY23, the port handled 5.1m container boxes (TEUs) and is
one of Europe's top five largest container terminals.

 

The portfolio had mixed share price performances in November. TAV Airports'
share price was up by 19.1%, assisted by more positive market sentiment as
well as recovering some ground for prior months weakness as the stock is now
more attractively valued, whilst PPA's share price was up by 11.6% based on
improved market expectations. Sunevision, the Hong Kong listed data centre was
also up by 8.0% as the stock continues to benefit from increased demand for
data centres on the back of the huge growth of AI. Aguas Andinas was also up
by 6.9% as the Chilean Water company finally received its long awaited tariff
increase of 5.0%.

 

Share price weakness for the month was seen primarily with the Brazilian
companies on the back of the disappointing fiscal package that was announced.
Serena, the renewable energy company was impacted the hardest during the
month, down by 24.3% suffering from being a small cap with low liquidity
alongside Orizon which was down by 10.0%. Ocean Wilsons was also down by 11.2%
affected by the poor market sentiment and weaker Brazilian Real.

 

Portfolio purchases amounted to £9.5m and total realisations were £5.8m.

 

DEBT

UEM's debt at the end of November remained at £20.1m and was drawn in US
Dollars (USD 15.0m) and Euros (EUR 10.0m).

 

OTHER

UEM's share price decreased in the month by 5.2%, ending November at 200.00p.
The discount to NAV widened to 22.0% from 20.3%. UEM bought back 0.3m shares
at an average price of 209.47p in the month, taking the total shares bought
back in the eight months to 30 November 2024 to 3.7m, equivalent to 1.9% of
the share capital as at 31 March 2024.

 

On 21 November 2024, UEM declared an increased second quarterly interim
dividend of 2.325p per ordinary share in respect of the year ending 31 March
2025, an uplift of 8.1% on the last quarter dividend. This will be paid on 19
December 2024 to shareholders on the register on 29 November 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, Nita
Shah
+44(0)20 3770 7913

utilico@montfort.london

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