17 June
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 eased by 0.3%
in May, a narrower decline than the MSCI Emerging Markets total
return Index ("MSCI") which was down by 1.2% in Sterling terms in
the month. This takes UEM's NAV total return performance since 31
March 2024 down 0.3%, slightly trailing the MSCI which was up 0.1%
in Sterling terms over the same period.
Global stock markets were mixed in
May, as inflation in many jurisdictions proved more stubborn than
previously expected. In the US the Federal Reserve kept rates on
hold, notwithstanding which the S&P 500 Index strengthened by
4.8% as consumer spending held up and the rally in AI stocks
continued. European markets were more benign, but also posted
positive performances with the Eurostoxx and FTSE 100 up 1.3% and
1.6% respectively over the month.
In emerging markets, pre-election
jitters saw the India Sensex ease by 0.3% and the Mexico Bolsa IPC
decline by 2.7%, though both remain close to all-time highs. India
GDP growth again exceeded expectations, coming in at 7.8% in the
quarter ended March 2024. In Brazil, the Bovespa Index fell by 3.0%
after the Central Bank slowed its pace of interest rate cuts to
25bps, citing concerns over the inflation outlook. Sentiment here
was negatively compounded by President Lula's decision to replace
the CEO of state-owned oil company Petrobras and the prospect of
weakening fiscal targets.
In China, manufacturing activity
unexpectedly contracted in May with the manufacturing PMI declining
to 49.5 from 50.4 in April. The Hong Kong Hang Seng Index was up
1.8% while the Shanghai Composite Index declined by 0.6% over the
month. Markets in the Philippines and Indonesia were also weak,
with the PSEi Index and Jakarta Stock Exchange Index down 4.0% and
3.6% respectively. The outlier for the region was Vietnam, where
the Ho Chi Minh Index was up 4.3% despite net selling by foreigners
and the dismissals of several high-ranking officials in the
country.
Sterling strengthened against most
currencies in May, up 3.1% versus the Brazilian Real, 1.7% against
the Indian Rupee and the Chinese Renminbi, and 2.1% against the
Vietnamese Dong. Sterling was broadly flat against the Euro and up
1.7% versus the US Dollar.
PORTFOLIO
There was one change to the top
holdings, with China Datang Renewable Power re-entering the top
thirty, replacing Petalite on relative performance. China Datang
Renewable's share price was up 13.9% in May, recovering from
depressed levels. Meanwhile, the valuation of UEM's investment in
Petalite was reduced by £1.6m in May to reflect feedback from the
ongoing Series A fund raise.
In the Philippines, Manila Water's
share price was up 8.7% over the month after posting robust Q1
results with EBITDA up 29.5% year-on-year on the back of tariff
increases and volume growth. ICT's share price was up 2.7%,
consolidating gains close to all-time highs. In Vietnam, there was
a strong performance in FPT shares, up 9.2% helped by the
improvement in local sentiment. UEM's investments in China were
mixed, with Kunlun Energy up 6.4% but Shanghai International
Airport down 7.7%. In Korea, KINX's share price fell by 13.1% as
the commissioning of its new datacentre faced minor delays. UEM's
investments in India were broadly flat.
In Brazil, most investments were
down in May, with Santos shares falling by 15.2% notwithstanding
stellar results with Q1 EBITDA more than doubling and April volumes
still showing robust growth. JSL's share price was down 9.9% and
Ocean Wilsons declined by 8.4%, while Sabesp decreased by 8.6% over
uncertainty around the regulatory parameters ahead of its imminent
privatisation. More resilient performances were delivered by Orizon
up 5.2%, Alupar up 4.3% and Serena Energia up 4.7%.
In Central and Eastern Europe, it
was pleasing to see Inpost shares climb by 9.2% following strong Q1
figures which saw an acceleration in Polish volumes and encouraging
progress in the UK, with group EBITDA up 36%. TAV's share price was
also up, rising by 9.5% over the month.
Portfolio purchases amounted to
£6.9m and realisations totalled £14.9m.
DEBT
UEM's debt remained at nil in the
month. Discussions for a replacement bank facility are
continuing.
OTHER
UEM's share price was unchanged over
the month at 226.00p. The discount to NAV narrowed to 17.2% from
17.5%. UEM bought back 0.7m shares at an average price of 231.15p
in the month, taking the total shares bought back in the two months
to 31 May 2024 to 1.3m, equivalent to 0.7% of the share capital as
at 31 March 2024.
A fourth quarterly interim dividend
of 2.15p per ordinary share in respect of the year ended 31 March
2024 was declared and will be paid on 28 June 2024 to shareholders
on the register on 7 June 2024.
ICM
TEAM
After over ten years as a valued UEM
investment team member, Jon Groocock is leaving ICM to seek new
opportunities. All of us at ICM wish Jon every success in the
future.
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