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
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