12 November
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
marginally in October by 0.5%, in line with the MSCI Emerging
Markets total return Index which was down by 0.4% in Sterling terms
during the month.
Global markets in October were
volatile with the US election looming and the race for the White
House between Donald Trump and Kamala Harris continuing to be
close. Uncertainty surrounding potential post-election policy
shifts continued to resonate especially as the markets began to
consider the impact on inflation and interest rates of a highly
expansionary fiscal policy signalled by Trump in his election
campaign. The US Dollar for the month therefore appreciated against
all major currencies in October, appreciating against Sterling by
4.3%. However, the S&P 500 Index ended down by 1.0% despite
reaching an all time high during the month.
In Asia, the emerging markets were
on the whole weaker. The Hang Seng Index and Shanghai Composite
Index were down by 3.9% and 1.7% respectively as the strong market
optimism that was witnessed in September dissipated. Clarity around
the stimulus package announced in September failed to materialise.
Concerns around China's growth outlook continued to simmer. India
was the weakest market in Asia during the month, with the Sensex
Index down by 5.8%, as investors continue to take profit on the
back of high valuations, resulting in pressure on the Indian Rupee
which fell to an all-time low against the US Dollar. The FTSE
Malaysia Bursa Index was also down by 2.9%, and the Vietnam Ho Chi
Minh Index and the Philippines PSEi Index were both down by 1.8%
during October. Thailand was one of the outliers in Asia for the
month up by 1.2% as the Bank of Thailand marginally increased GDP
growth forecasts for 2024 and cut interest rates by 25bps - the
first cut since early 2020. The Indonesian JCI Index was also up
marginally by 0.6%.
Within Latam, the Brazilian Bovespa
Index was down by 1.6% as persistent inflationary pressures
continue, increasing expectation of an interest rate rise in the
near term. The Brazilian Real also weakened with Sterling
appreciating against the Real by 1.9% over the month. Argentina was
the bright spot for the month, with the Merval Index up by 8.9% as
confidence in President Milei's structural
agenda improved, whilst Colombia's COLCAP Index was up 3.9%, helped
by the improvement of foreign inflows and the Chilean IPSA Index
was up by 0.9%.
PORTFOLIO
There was one change to the top
thirty holdings in October. Terna Energy replaced JSL on the back
of share price performance. Terna Energy is a Greek listed
renewable energy company primarily focused on wind and solar energy
as well as hydroelectric projects with some activity in waste and
biomass. Currently Terna Energy has installed capacity of 1,224 MW.
In June 2024, Terna Energy's majority shareholder Gek Terna who
owns 67%, received a bid from Masdar (Emirati state-owned renewable
energy company) at EUR 20.00 per share and upon acquiring 67%,
Masdar is expected to launch a mandatory tender offer for the
remaining minorities in the coming months.
The portfolio had mixed performances
in October. Holding Burstil Regional "Naum", the holding company
that controls the stock exchanges in Colombia, Chile, and Peru was
up by 6.7% for the month, reflecting the solid performance of the Colombian market. Inpost, the Euronext
Amsterdam listed leading e-commerce logistics infrastructure player
in Poland was up by 6.4% for the month, benefitting from Inpost
acquiring the remaining 70% stake in Menzies Distribution Limited,
taking its ownership to 100%. India Grid Trust's share price was
also up by 3.5% in the month.
Share price weakness during the
month was seen with some of the Chinese stocks as the market cooled
on the back of lack of detail around the proposed stimulus policy
announced in September. Subsequently Shanghai International
Airport, Kunlun Energy and China Gas Holdings were down by 9.0%,
7.6% and 7.5% respectively. The share price of Santos Brasil, the
Brazilian port operator, was down by 1.1% after adjusting for the
capital reduction and dividends paid.
Portfolio purchases amounted to
£18.6m and total realisations were £12.8m.
DEBT
UEM's debt at the end of October
increased marginally from £19.5m to £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 2.8%, ending October at 211.00p. The discount to NAV
widened to 20.3% from 18.4%. UEM bought back 0.4m shares at an
average price of 213.93p in the month, taking the total shares
bought back in the seven months to 31 October 2024 to 3.3m,
equivalent to 1.7% 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 / Alastair
Moreton
Montfort Communications
Gay Collins, Nita
Shah
+44(0)20 3770 7913
utilico@montfort.london