Utilico Emerging Markets Trust PLC Publication of monthly factsheet (0436S)
06 Marzo 2023 - 3:02PM
UK Regulatory
TIDMUEM
RNS Number : 0436S
Utilico Emerging Markets Trust PLC
06 March 2023
6 March 2023
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
Monthly commentary
PERFORMANCE
UEM's NAV total return decreased by 2.6% in February, performing
better than the MSCI Emerging Markets total return Index which was
down by 4.7% in Sterling terms for the month.
Unlike the positive "risk-on" market rally witnessed in January,
fuelled by falling inflation data and expectations that key central
banks are nearing the end of their aggressive interest rate rising
cycle, February saw the majority of markets experience weakness and
becoming "risk-off". This swing in markets was driven by stronger
than expected economic data, such as indications of a continued
tight labour market from the US, indicating that a recession may
not be on the horizon and subsequently inflationary pressures could
persist for longer, resulting in the reduction of interest rate
cuts to come later and possibly at a slower pace than anticipated.
The US Federal Reserve Bank's Chairman Jay Powell also indicated
that further rate increases are likely, especially if strong macro
data continues to persist. During February, the Federal Bank
increased rates by 25bps to 4.75%, whilst both the Bank of England
and the European Central Bank increased by 50bps raising interest
rates to 4.0% and 2.5% respectively. The S&P Index was
therefore down for the month by 2.6%.
The Hang Seng Index declined in February by 9.4%, despite the
expectation that the re-opening of China post Covid-19 might lead
to a rapid consumption boom due to the high amount of savings built
up during lock down. Continued geopolitical tension led to some
profit taking. The Chinese A-share market weathered the
geopolitical pressures better as the Shanghai Composite was
essentially flat for February, up marginally by 0.7%. Other Asian
markets also saw weakness, with the Philippines PCOMP Index down by
3.5%, the Thai SET Index down by 2.9% and the Vietnamese market
down by 7.8%. The Vietnam Ho Chi Minh Index was also impacted by
ongoing pressure arising within the property market as the second
largest developer delayed a repayment of a bond, widening concerns
about the property debt crisis.
The Brazilian Bovespa also declined by 7.5% in February, due to
deterioration of investors' sentiment in the face of uncertain
economic policy. This, combined with a dispute between the
Brazilian Central Bank and Lula's government, unsettled the
markets. The market is pricing no rate cuts this year, even though
Brazil has one of the highest real interest rates in the world. The
Mexican Bolsa was also down 3.3%.
Sterling was mixed, strengthening 2.8% against the Australian
Dollar, 3.5% against the Malaysian Ringgit and 4.7% against the
Thai Baht, but weakened 1.7% against the US Dollar, 4.1% against
the Mexican Peso, and 1.5% against the Hong Kong Dollar. Notably
the US Dollar had its first positive month since September 2022,
benefitting from the expectation of an extended US monetary policy
tightening cycle.
PORTFOLIO
Performance across UEM's portfolio in February was mixed with
two changes to the top thirty as Aguas Andinas replaced My EG and
Grupo Traxion replaced Chindata. Aguas Andinas i s the largest
water and sanitation company in Chile. Its main concession area is
the metropolitan region of Santiago, with its other major region in
the North of the capital (Aguas Cordillera and Agias Manquehue).
Grupo Traxion is a Mexican land transportation and logistics
company that is currently benefitting from nearshoring as it is
operating in the cargo, logistics solutions, and personnel and
student transportation segments.
During the month, Kinx witnessed a share price increase of 11.7%
driven partly by solid full year results, whilst Umeme, the Ugandan
electricity distribution company, who announced in December 2022
that its concession will not be renewed but will be compensated for
unrecovered investment, increased by 7.1%. Grupo Aeroportuario Del
Pacifico, the Mexican airport operator, was also up by 7.0% on the
back of continued robust results. Eletrobras' share price was down
in February by 15.3% due to the sharp decrease in energy spot
prices resulting from a significant improvement in reservoir levels
and a potential oversupply of energy generation in the country.
Inpost was also down by 11.4% and Telelink down by 10.4% on news
that the minimum dividend pay-out ratio may be cut to fund growth
or merger and acquisition opportunities. Overall, the portfolio saw
fifteen companies witness share price increases and the remaining
half, share price declines.
During February, purchases for the portfolio totalled GBP13.9m
and realisations totalled GBP7.0m.
DEBT
UEM's bank debt marginally increased from GBP25.2m to GBP25.4m
and was drawn as EUR 12.0m and USD 18.0m.
OTHER
UEM's share price ended February at 211.00p, down 2.3% over the
month. The discount to NAV narrowed slightly to 13.7% from 14.0%.
UEM bought back 0.9m shares at an average price of 215.80p in the
month.
A third quarterly interim dividend of 2.15p per ordinary share
in respect of the year ending 31 March 2023 was declared, which
will be paid on 24 March 2023 to shareholders on the register on 3
March 2023.
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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March 06, 2023 09:02 ET (14:02 GMT)
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