Change of benchmark and discount management policy

RNS Number : 8343Q

Advance Developing Markets Fund Ltd

26 October 2011

 



Advance Developing Markets Fund Limited

Change of benchmark and discount management policy

The Board of Advance Developing Markets Fund Limited ("ADMF" or the "Company") announces its intention to change the Company's existing benchmark from the start of the Company's forthcoming financial year, which commences on 1 November 2011, and to confirm its policy regarding management of the discount to net asset value at which the Company's shares trade.

Benchmark

Following a review of the Company's existing benchmark, the S&P/IFCI Emerging Markets Composite Index, the Board believes that it is now appropriate for it to be changed to the MSCI Emerging Markets Net Total Return Index (Bloomberg ticker: NDUEEGF Index).  This change will also align the Company's benchmark with that of the majority of its peers in the global emerging markets equity fund sector.

Discount management policy 

The Board believes it is desirable that the Company's shares do not trade at a significant discount to net asset value and it has been the Board's on-going policy to take action where appropriate in order to manage the discount. The Board has therefore decided to confirm formally its discount management policy, set out below, which will also be published in its next Annual Report and Accounts:

"The Board considers it desirable that the Company's shares do not trade at a significant discount to net asset value and believes that, in normal market conditions, the shares should trade at a price which on average represents a discount of less than 10 per cent. to diluted net asset value.  To assist the Board in taking action to deal with a material increase in the discount it seeks authority from shareholders annually to buy back shares.  Shares may be repurchased when, in the opinion of the Board and taking into account factors such as market conditions and the discounts of comparable funds, the Company's discount is higher than desired and shares are available to purchase in the market.  The Board is of the view that the principal purpose of share repurchases is to enhance net asset value for remaining shareholders, although it may also assist in addressing the imbalance between the supply of and demand for the Company's shares and thereby reduce the scale and volatility of the discount at which the shares trade in relation to the underlying net asset value."

26 October 2011

For further information please contact:

Advance Emerging Capital Limited

(Investment Manager)
Dr Slim Feriani                                                  Tel: [phone]                   

Cavendish Administration Limited

(UK Administration Agent)
Anthony Lee / Russell Scott                        Tel: [phone]

Westhouse Securities Limited

Financial Adviser and Broker

Alastair Moreton / Hannah Young            Tel: [phone]

 

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