Interim Management Statement (7898B)
20 Aprile 2012 - 3:48PM
UK Regulatory
TIDMIAEM TIDMIAES
RNS Number : 7898B
Impax Asian Environmental Mkts Plc
20 April 2012
Impax Asian Environmental Markets Plc ("IAEM" or the
"Company")
Interim Management Statement
For the three months ended 31 March 2012
This interim management statement covers the period from the 1
January 2012 to 31 March 2012 (the "Period"), and is prepared in
accordance with the UK Listing Authority's Disclosure and
Transparency Rule 4.3.
Investment Objective
The Company's investment objective is to generate long-term
capital growth through investment in a diverse portfolio of
companies in the markets for cleaner or more efficient delivery of
basic services of energy, water and waste in the Asia-Pacific
Region. To be eligible for investment, such companies must have at
least 20% of their turnover, profits or invested capital in these
markets.
Performance
During the Period, the Company's undiluted NAV per Ordinary
Share (excluding current year net revenue) rose by 12.3% from 87.5p
to 98.2p whilst the MSCI AC Asia Pacific ex-Japan Index and the
FTSE Environmental Opportunities Asia Pacific ex-Japan Index rose
by 8.8% and 11.4% respectively (price returns in pounds
sterling).
After a very difficult year in 2011, it is encouraging that IAEM
has started 2012 with strong performance. Equity markets posted
their strongest first quarter performance since 1998 as economic
data in the US continued to exceed expectations and Eurozone risks
diminished as the ECB offered a second tranche of long-term funding
to Eurozone banks and private holdings of Greek government debt
underwent an orderly restructuring. Whilst economic data in China
and India were at the lower end of expectations, lower inflation
rates enabled policy makers to respond by cutting reserve rate
requirements.
Environmental markets outperformed led by the energy efficiency,
water infrastructure and waste management. China announced plans to
support the domestic light-emitting diode ("LED") market. Korea
confirmed details of its offshore wind development. Japan continued
to investigate its energy options with a New Energy Bill expected
in the third quarter.
Gearing
At the start of the period the Company had drawn down US$40
million from its US$50 million revolving credit facility.
Discount
Over the three months ended 31 March 2012, the IAEM Ordinary
Share price traded at an average discount to net asset value of
14.4%. At 31 March 2012 the discount stood at 15.4%. The current
market conditions remain difficult for specialist closed-end funds.
The Board has utilised the Company's buy back facility and
2,000,000 Ordinary shares were bought back in the Period to be held
in treasury. The Board and the Company's advisers continue to
monitor the discount closely and the Board will continue to
exercise its buy back powers when it deems circumstances to be
appropriate.
Portfolio Activity
During the Period, the Company added seven new holdings to its
portfolio and sold out of three positions. Three of the additions
had previously been sold by the Company on valuation grounds but
share price weakness resulting from macro-economic concerns offered
an opportunity to re-enter at attractive levels. The five largest
holdings as at 31 March 2012 are set out below and illustrate the
Manager's continued preference for a diversified portfolio.
Company Activity Country where Portfolio weighting
listed
ENN Energy Natural gas distribution Hong Kong 3.6%
Efficient gas water
Rinnai heaters Japan 3.4%
Delta Electronics Efficient power electronics Taiwan 3.3%
Epistar LED manufacturer Taiwan 3.3%
LG Chem Efficient batteries Korea 3.2%
Outlook
Following the strong start to the year we expect a period of
consolidation in equity markets as investors await confirmation
that the recovery in US economic activity is sustainable and that
European sovereign risk issues will not re-emerge. Uncertainty
remains regarding the strength of the Chinese economy but we
anticipate that further easing in China will continue to support
the re-rating of smaller companies. We also anticipate further
easing in India in order to support economic activity in 2012 but
this has been discounted too some extent. The momentum of
environmental policy and legislation in the Asia Pacific region
remains strong with energy efficiency and the water sector being
key areas of focus for the Chinese Government. Given the attractive
valuation and superior expected growth rates, the Manager and the
Board believe that the Company offers a good opportunity for medium
to long term investors seeking exposure to the Asian environmental
sector.
The interim management statement will be made available on the
Manager's website www.impax.co.uk
20 April 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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