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1 Includes net
revenue of 0.12p.
2 Excluding
13,566,697 ordinary shares held in treasury.
3 The Company’s
ongoing charges are calculated as a percentage of average daily net
assets and using the management fee and all other operating
expenses excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation and certain other
non-recurring items for the year ended 30 November 2023.
In
addition, the Company’s Manager has also agreed to cap ongoing
charges by rebating a portion of the management fee to the extent
that the Company’s ongoing charges exceed 1.25% of average net
assets.
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Commenting
on the markets, Tom Holl and Mark Hume, representing the Investment
Manager noted:
The
Company’s Net Asset Value (NAV) increased 1.6% in September 2024
(in GBP terms).
September was
marked by significant volatility in equity markets, driven by mixed
economic data, central bank decisions and geopolitical
uncertainties. In the US, early September conditions mirrored the
downturn seen in early August, reflecting a partial repeat of the
summer’s sell-off, which was triggered by disappointing data from
the manufacturing sector and the jobs market. The Federal Reserve
(Fed) reduced borrowing costs by 0.5%, exceeding the 0.25% cut
anticipated by many analysts. Fed Chair Jerome Powell alleviated
concerns by indicating that the US economy was on track for the
“soft landing” that markets had long hoped for. Towards the end of
the month, China contributed to market gains with the announcement
of substantial stimulus measures, as the government intensified
efforts to meet its growth targets for 2024 and beyond. However,
geopolitical uncertainty persisted, particularly with rising
tensions in the Middle East.
Within the energy
sector, oil prices fell reflecting concerns about slower economic
growth and oil demand growth from China, where expectations were
revised down from growth of 700kbpd to less than 200kbpd, whilst
2024 sees oil production rise as large projects in Norway and
Guyana move into production. On the other hand, oil demand from the
US, Indian and Asian ex-China was stronger than expectations,
softening the impact of weaker oil demand from China. Natural gas
prices increased on potential disruption from hurricanes in the US
and as demand begins to rise heading into the winter season. In the
days following month end, oil prices increased on escalating events
in the Middle East, with potential for oil supply disruption. The
Brent oil price fell by 9.8%, whilst WTI fell by 7.7%, ending the
month at $72/bbl and $69/bbl respectively. The US Henry Hub natural
gas price rose by 37% during the month to end at
$2.91/mmbtu.
Within the mining
sector, the main news was China announcing a range of stimulus
measures. Iron ore (62% fe), copper and gold prices rose by 8.4%,
6.3% and 5.1% respectively. Meanwhile, energy costs came down
during the month, suggesting a positive outlook for the miners’
margins. Elsewhere, the uranium price rose by 3.0% as excitement
built around nuclear. During the month, Microsoft signed a deal
with Constellation Energy to restart its Three Mile Island nuclear
plant in Pennsylvania to help power its data centres.
Within the
sustainable energy theme, the World Meteorological Organisation
forecast that 2024 will be the warmest on record and that the
number of ‘hot days’ faced by major cities would climb, likely
further increasing the demand for cooling and increased related
energy demand. Meanwhile, in clean transportation, the European
Commission pushed back against the European car industry lobby
proposed delay of the European Union (EU)’s CO2 emission target
reduction to 93.6 g/km, emphasising that automakers had ample time
to prepare since the regulations were first introduced.
All
data points in US dollar terms unless otherwise specified.
Commodity price moves sourced from Thomson Reuters
Datastream.
22
October 2024
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