REG - Utilico Emerging Mkt - Publication of monthly factsheet

Utilico Emerging Markets TrustAnnouncement

12/02/2025 15:30

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RNS Number : 9010W  Utilico Emerging Markets Trust PLC  12 February 2025

12 February 2025

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 up in January by 3.0%, outperforming the MSCI
Emerging Markets total return Index which was up by 2.3% in Sterling terms
during the month.

 

Donald Trump was inaugurated as President of the United States and as in prior
months, speculation about his administration's policies dominated investor
sentiment globally. The level of uncertainty, especially with regards to
import tariffs, trade and foreign policy remained high. The release of
DeepSeek, a rival to ChatGPT, developed by a Chinese company reportedly using
lower computing power intrigued the market, posing questions about America's
lead in AI technology and future demand for the latest Nvidia processing
chips.

 

Generally, developed markets were positive during January. The S&P 500
Index advanced by 2.7% in the month. Europe's markets were strong, with the
FTSE 100 advancing by 6.1%, the Eurostoxx Index was up by 8.0% and the DAX
Index in Germany was up by 9.2%. Europe's performance seemed to be driven by
investors rebalancing portfolios due to the low relative valuation of European
versus US equities rather than any clear geopolitical or economic catalyst.
The US Federal Reserve held rates as expected at its January meeting, whilst
the European Central Bank and Bank of England had their first meetings of the
year scheduled for early February, with rate cuts by both institutions
expected.

 

In the emerging markets, the wait continues for tangible signs of China's
stimulus measures, with policy makers perhaps waiting for Trump to take office
and to see Chinese New Year consumer spending patterns before making
decisions. The Shanghai Composite Index declined by 3.0% whilst the Hang Seng
Index was up by 0.8%. In India, markets were subdued ahead of the Union Budget
announcement on 1 February 2025, with the Sensex Index declining by 0.8% in
January.

 

In January, there was a recovery in the stock market in Brazil with the
Bovespa Index up by 4.9% and the Brazilian Real appreciated by 6.6% versus
Sterling.  The Selic rate was raised by 100bps during the month to 13.25%.
Elsewhere in Latin America, the threat of tariffs on Mexican goods was a clear
overhang but despite this the IPC Index did gain 3.4% in the month and the
Mexican Peso firmed by 1.5% against Sterling. Threats of tariffs on Colombian
imports into the US were quickly withdrawn and the MSCI Colcap Index was up by
10.3% in January also benefiting from election speculation. Another strong
market performer was Poland, where the MSCI Poland Index gained 11.5% in the
month.

 

There was a sharp fall in the Philippines market at the end of January, when
most of the rest of the region was closed for the Chinese New Year holidays,
in response to lower than expected GDP growth, concerns over higher US
interest rates and food inflation. The PSEI index declined 10.2% in January.
There was also weakness seen in Thailand, with the SET Index down 6.1% and the
Bursa Malaysia Index fell by 5.2%.

 

PORTFOLIO

There were three changes to the top thirty holdings in January. Interconexion
Electrica (ISA), Corficolombiana and Anhui Expressway replaced China Gas,
Medikaloka Hermina and Power Grid Infrastructure due to relative performance
in the month.

 

ISA is a leading electricity transmission company based in Colombia, with
assets across South America. Corficolombiana is one of the largest
infrastructure companies in Colombia, with operations predominately in
midstream and downstream gas segments and toll roads. Anhui Expressway is a
Chinese toll road operator.

 

The year started with a risk on sentiment in Latin America, driven by
attractive valuations, less crowded trades, and early signs of a more
pro-market political cycle. This led to significant gains in both equities and
currencies across the region's major economies. In January, UEM's largest
Brazilian holdings, Alupar, Orizon and Sabesp, all rose by 7.3%, 9.6% and
6.9%, respectively. Serena Energia's share price rose by 18.0%. Colombia also
performed well, with Corficolombiana increasing 18.3% and ISA's share price up
by 10.7%.

 

Another notable riser was Telelink Business Services, with a 13.5% gain in its
share price, albeit on relatively low volumes. Umeme was up 6.4% in the month.

 

Asian holdings were generally weaker. International Container Terminal's fall
of 9.1% in the month reflected the sentiment in the wider Philippines' market,
although Manila Water's share price was more resilient and gained 0.7% for
January.

 

Chinese holdings were also volatile ahead of the Chinese New Year holiday.
Kunlun Energy reversed most of December's strong gains, falling by 11.3% in
January. Sunevision declined by 12.0% and Citic Telecom was down by 5.0%
during the month.

 

Portfolio purchases amounted to £4.3m and total realisations were £8.7m.

 

DEBT

UEM's debt at the end of January remained drawn in US Dollars (USD 15.0m) and
Euros (EUR 15.0m) although the balance in Sterling terms increased 0.8% to
£24.6m reflecting exchange rate movements.

 

OTHER

UEM's share price was unchanged for the month, ending January at 213.00p. The
discount to NAV increased to 19.8% from 17.4%.

 

UEM bought back 302,454 shares at an average price of 214.33p in the month,
taking the total shares bought back in the ten months to 31 January 2025 to
4.1m shares, equivalent to 2.2% 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, Jacqueline Broers, Alastair Moreton

 

Montfort Communications

Gay Collins, Nita
Shah
+44(0)20 3770 7913

utilico@montfort.london

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