Final Results

JPMorgan Emerging EMEA Securities

24 January 2024

 

LONDON STOCK EXCHANGE ANNOUNCEMENT

JPMORGAN EMERGING EUROPE, MIDDLE EAST & AFRICA SECURITIES PLC

ANNOUNCEMENT OF FINAL RESULTS

The Directors of JPMorgan Emerging Europe, Middle East & Africa Securities plc

Announce the Company's Results for the Year Ended 31^st October 2023

Legal Entity Identifier:

549300II3MHI98ZLVH37 Information disclosed in accordance with DTR 4.1.

CHAIRMAN'S STATEMENT

Overview and performance

In November, 2022 the Company received shareholder approval of the Company's new investment objective. The operations, control structures and trading of securities under the new investment objective and using the Company's new name were completed and commenced in the first half of this reporting period. The Company no longer has a benchmark index against which it is measured but the completion of this process allowed the Company to commence measurement of the performance of its portfolio against its new reference index, the S&P Emerging Europe, Middle East & Africa BMI Net Return in GBP on 1st March 2023.

I am pleased to report that in the eight months from 1st March 2023 (from which date the new reference index applied) to 31st October 2023 the Company's net asset value increased by 2.2%, an out-performance of 1.9% against the reference index. Although this annual report is for the 12 month period ended 31st October 2023, which resulted in no change in the Company's net asset value (0.0%), the performance for the eight month period is also identified in the Financial highlights on page 6 of the Company's annual report and financial statements. This is because the Company's new investment objective applied for this eight month period, enabling it to hold investments that could be traded and generate income. The eight month period to 31st October 2023 is also the focus of the Investment Managers' Report on pages 12 to 17 of this report.

On a share price total return basis, the Company returned 10.0% in the eight month period from 1st March to 31st October 2023. As at 31st October 2023, the Company's share price was 119.9 pence, an increase of 51.8% in the 12 month period. As at 19th January 2024 the share price was 130.0 pence.

The Company's Portfolio

The Company's new investments acquired in this reporting period are considered to be in high quality companies, with a tilt towards value and income and a focus on maximising total return for shareholders. The new investments have also changed the portfolio's geographical focus with Saudi Arabia, South Africa and UAE representing 31.7%, 23.8% and 14.2% of the portfolio respectively - see page 26 of the Company's annual report and financial statements.

The tragic events in Ukraine since Russia's military invasion commenced on 24th February 2022 continue to cast a shadow over the global economy.

The valuation of the stocks that we hold in Russia were reduced to nominal values last year. The strict economic sanctions that followed the invasion have continued to reduce the valuation of the Company's Russian assets in this 12 month reporting period to 31st October 2023. Additionally, the rouble has materially reduced in value against sterling and other currencies.

Extensive details on the negative impact that the events in Ukraine have had on the Company are provided in my Chairman's Statement included in the Company's 2022 annual report and in the list of questions and answers (Q&A) available on the Company's website www.jpmeemeasecurities.com.

The Board has sought to keep shareholders informed of material developments arising in relation to the Company's holdings in its Russian stocks during this continuing difficult period. In August and October 2023, the Board released RNS announcements referring to the tender offers received from Detsky Mir and Magnit, two companies in the Company's portfolio, and to the Company's participation in the Detsky Mir tender offer. The Board reiterates that where it is permissible and beneficial for shareholders under the current sanctions regime the Company's Investment Manager will seek to participate in such corporate actions. On that basis the Company participated in the Detsky Mir tender offer which was being undertaken in Detsky Mir's restructuring from being a public listed company to a private company. The Company's application was successful and it received proceeds of RUB 286.2 million, (approx. £2.35 million based on exchange rates at that time). The proceeds are held in a custody 'S' account in Moscow and are not recognised in the Company's net asset value (for further details regarding the 'S' account see below).

The Board is also aware that some western institutions have been able to sell Russian stockholdings at a substantial discount to local exchange values where they are held through depository receipts in exchange for western currencies. Most of our holdings are held directly on the local exchange and some depository receipts. Where permissible and beneficial for shareholders under the current sanctions regime the Company's Investment Manager may consider such actions.

Revenue, earnings and dividend

The Company's net revenue for the 12 month period to 31st October 2023 after taxation was £306,000 (31st October 2022: £4,314,000) and the return per share, calculated on the basis of the average number of shares in issue, was 0.76 pence (31st October 2022: 10.66 pence) per share.

These large reductions in the Company's net revenue and return per share are understandable given the prohibition on receipt of dividends from Russian companies by foreign investors, introduced soon after Russia's invasion of Ukraine in February 2022 which have eliminated the Company's revenue from its Russian holdings in its accounts entirely. In addition, the securities added to the Company's portfolio under the new investment objective were only acquired towards the end of the first half of this reporting period and therefore have had less time to make a positive impact on revenue.

At present, the dividends paid from the Russian securities in the Company's portfolio and the £2.35 million proceeds from the Detsky Mir tender are held in a custody 'S' account in Moscow. The balance on the 'S' account as at 31st October 2023 was equivalent to approximately £19.3 million at the exchange rate applicable on that date. The Company's Manager is monitoring the receipts into the 'S' account against dividends announced by the portfolio companies, although there is no certainty that the sums in the 'S' account will ever be received by the Company.

As at 31st October 2023, an additional £5.1 million of dividend income has been announced but is yet to be received. Your Board maintains a keen interest in this in order to be satisfied that all dividends due are in fact recorded in the 'S' account. The addition of this sum to dividends already in an 'S' account brings the total dividends received or announced in relation to our Russian holdings to £24.4 million. As previously detailed, these dividends cannot be remitted to the Company and may never be received. They are not recognised in the Company's net asset value or in its income statement.

Nonetheless I am pleased to announce that the Company will recommend the payment of a dividend of 0.5p per share. This will be funded from net revenue received during the year. Subject to shareholder approval the dividend will be paid on 15th March 2024 to shareholders on the Company's register on 2nd February 2024 the ex dividend date being 1st February 2024. Going forward, the Board's expectation is that an annual dividend will be paid if net revenue allows.

Discount control

Due to the continuing extreme market conditions that have created the unusual situation whereby the Company's shares are currently trading at a very elevated premium to its net asset value, the Board has no current plans to reinstate the Company's share discount control programme. As at 31st October 2023, the premium was 156.7%. The Board believes that this premium arises due to the market's view of what the Company's net assets are valued at and the likelihood of ultimately accessing the Russian assets and should not be interpreted as an indication that investors are more likely to derive any value from the Company's Russian shareholdings. The Board acknowledges the significant vote against the resolution to amend the Company's investment objective at the General Meeting on 23rd November 2022 and has sought feedback from shareholders to understand their concerns. Shareholders concerns and the actions undertaken to address them are detailed further in the Q&A available on the Company's website www.jpmeemeasecurities.com. The Board reiterates that it has no current plans to buy back or issue shares in the Company.

Environmental, Social and Governance

Environmental, Social and Governance ('ESG') considerations are integrated into the Investment Managers' investment process as set out in the ESG Report on page 18 of the Company's annual report and financial statements. The Board shares the Investment Managers' view of the importance of ESG factors when making investments for the long term and of the necessity of continued engagement with investee companies throughout the duration of the investment where it is feasible.

Task Force on Climate-related Financial Disclosures

On 30th June 2023, JPMAM published its first UK Task Force on Climate-related Financial Disclosures Report ('TCFD') for the Company in respect of the year ended 31st December 2022. This was required in order to meet its regulatory requirements as the Company's Manager. The report discloses estimates of the portfolio's climate-related risks and opportunities according to the Financial Conduct Authority Environmental, Social and Governance Sourcebook and the Task Force on Climate-related Financial Disclosures Recommendations. The report is available under ESG Documents section on the Company's website: www.jpmeemeasecurities.com This is the first report under the new guidelines and disclosure requirements. The Board is aware that best practice reporting under the TCFD regime is still evolving both with regard to metrics and input data quality, as well as the interpretation and implications of the outputs produced, and will continue to monitor developments as they occur.

Investment Management

Oleg Biryulyov and Pandora Omaset continue to be the Company's Investment Managers supported by JPMorgan Asset Management's Emerging Markets and Asia Pacific equities team (EMAP). JPMAM's EMAP team consists of 100+ investment professionals based in both the UK and overseas.

The Board receives regular reports on the service levels of the Manager and its key service providers and formally evaluated their services in September 2023. Following that review the Board concluded that it was satisfied with the current levels of service.

On completion of the acquisition of new securities under the Company's new investment objective on 1st March 2023, the Manager reinstated the management fee in respect of the Company's net assets, excluding the Russian holdings, with effect from the same date. The acquisition of the new securities were undertaken by the Manager using their established integrated ESG procedures. For further details please see the Investment Managers' Report on page 12 of the Company's annual report and financial statements.

Board Composition

Your Board has been considering whether or not it would be appropriate to recruit an additional board member at present. The board has sought to balance the requirements to be effective and have resources to achieve long term sustainable success together with the need to manage ongoing costs. Given that the Company has now established a source of dividend income from its new portfolio, it has decided to commence the search for a fourth director. A third party independent search consultant has been engaged to identify appropriate candidates for this role with the aim of making the appointment in 2024.

Annual general meeting

The Company's Annual General Meeting (AGM) will be held on Monday 4th March 2024 at 2.30 p.m. at 60 Victoria Embankment, London EC4Y 0JP. We are pleased to invite shareholders to join us in person for the Company's AGM, hear from the Investment Managers and ask questions. Shareholders wishing to follow the AGM proceedings but choosing not to attend in person will be able to view proceedings live and ask questions (but not vote) through conferencing software. Details on how to register, together with access details, will be available shortly on the Company's website at www.jpmeemeasecurities.com or by contacting the Company Secretary at [e-mail]

My fellow Board members, representatives of JPMorgan and I look forward to the opportunity to meet and speak with shareholders after the formalities of the meeting have been concluded. Shareholders who are unable to attend the AGM are strongly encouraged to submit their proxy votes in advance of the meeting, so that they are registered and recorded at the AGM. Proxy votes can be lodged in advance of the AGM either by post or electronically: detailed instructions are included in the Notes to the Notice of Annual General Meeting on pages 89 to 92.

If there are any changes to these arrangements for the AGM, the Company will update shareholders via the Company's website.

Outlook

With little prospect of Russia's invasion of Ukraine being resolved in the foreseeable future or limiting of the existing strict economic sanctions, the Company's new investment objective at least helps the Company steer through this very difficult period. Although cognisant of the Company's continuing holdings in Russian companies, the challenge for the Board is to use the new investment objective to grow the Company's assets in a way that promotes the success of the Company for the benefit of the members as a whole.

The Board is confident that, with the assistance of the JPMorgan EMAP team over the long term and a supportive political and regulatory environment, its new investment objective is achievable.

Eric Sanderson

Chairman                                                                                                                                    23rd January 2024

INVESTMENT MANAGERS' REPORT

Introduction

As discussed in the Chairman's Statement of this report, and in previous reporting, the Company's Russian holdings continue to be effectively 'frozen'. This Investment Managers' Report therefore relates to the new investments acquired by the Company under its revised investment objective, which is to maximise total return to shareholders from a diversified portfolio of investments in Emerging Europe (including Russia), Middle East and Africa (EMEA). This new investment objective was approved by shareholders in November 2022 and we finished restructuring the Company in February 2023. This Report thus covers eight months of investment commencing on 1st March 2023, and ending on 31st October 2023.

Performance

During the period from 1st March 2023 to 31st October 2023, the Company's new investments rose 2.2% on a net asset value (NAV) basis, an out-performance of 1.9% against the reference index, the S&P Emerging Europe, Middle East & Africa BMI Net Return in GBP, which rose by a lacklustre 0.3%.

Portfolio

At the end of the financial year, the Company's portfolio comprised 89 stocks, compared to 87 holdings at the end of the financial half year. Of these, 26 are Russian securities, one less than at the financial half year end due to the change in status of Detsky Mir into a private company and the tender offer that followed in which the Company participated. The Company's Russian securities comprise approximately 8% of the written down value of the portfolio. As mentioned above, the Companies Russian securities are presently 'frozen', and their valuations have been discounted accordingly. The Company's holding in the JPM Liquidity fund is not included in the above numbers.

Market backdrop

During the review period, EMEA markets were, as usual, driven in part by developments beyond the Company's investable universe. Disappointment in the performance of the Chinese economy since its reopening in late 2022 weighed on investor sentiment not only in Asia, but also in other emerging markets, and across the developed world, as Chinese export demand has been weaker than expected. Investors are also concerned about ongoing issues in the Chinese property sector. The rapid increase in global interest rates over the past two years has been slow to register on economic activity, but the spectre of recession in the US and other western economies cast a pall over these markets for much of the past year. However, higher rates have been supportive for most financial names in these markets, boosting margins and dividends.

Within EMEA markets, the oil price remained the key determinant of market direction, and it has been volatile over the past year. News in May 2023 that the OPEC+ group of oil producers had agreed to cut production, removing about 1.5 million bbl per day from supply, supported the oil price during the 3rd quarter of 2023 ('3Q23'), but concerns about economic growth and stability of demand set downward pressure. This 'tug of war' tends to occur on the derivative market when 'real oil' markets are far more stable and mostly focused on volumes rather than price volatility. Thus, we saw the price end the period close to where it began. The reduction in oil production and oil price volatility ensured most major Middle Eastern oil producers struggled to make gains over the period. The notable exception was ARAMCO, the world's largest oil producer, and one of our largest positions, which benefitted from better than expected income reported for 3Q23 and consequent announcement of additional dividend pay out above the previously declared range.

Political developments were another significant driver for EMEA regional markets. In Poland, market euphoria in response to the victory for progressive opposition parties in national elections seems to us to be overdone, as we do not expect the change of government to result in any major changes to the country's economic outlook. In Turkey, the confirmation of President Erdogan for another five-year term came as no surprise, but investors, especially those from abroad, welcomed the appointment of market-friendly heads to both the central bank and the Ministry of Economy. The President has given them clear mandates to fight inflation and rationalise economic policy, but this will be a long and difficult task. As we outlined in the Company's Half Year Report, Turkey faces several significant macroeconomic challenges, and we are sceptical that the market's recent gains can be sustained. However, recent events at least hold out hope for some improvement in the Turkish economy, and we may be tempted to invest in this market if these early positive signs are followed by concrete evidence that the investment environment has stabilised. Elsewhere, the sudden, violent developments in Israel and Gaza shocked the world, but are unlikely, in our view, to escalate into broader conflict across the Middle East. However, their longer-term implications for the regional and global political situation, while still unclear, are likely to be profound.

Events in Poland and Turkey saw these markets outperform relative to other countries in the reference index over the review period on the market assessment that their country risk premia had diminished. Greece also did well, thanks to upward revisions to the earnings outlook., Greece is going through the process of upward adjustment of the investment grade of its debt. This upward revision led to a reduction in the costs of equity and increase market acceptance of investment multiples. Cuts to oil production saw Saudi Arabia and UAE underperform. South Africa also lagged due to long running concerns about stability of electricity supply and negative earnings momentum related to lower consumption rates of the population and profit margin squeezes for business.

Another notable feature of the past year was the poor relative performance of large stocks such as those within the financial and petrochemical industries, while mid-caps such as Al Arabia (largest outdoor advertising Company in Kingdom of Saudi Arabia) and Saudi companies ELM, an IT services company and Riyadh Cables, a supplier of power transmission and communication cables, outperformed. Newly listed names such as oil and gas companies ADES, Abu Dhabi National Oil Company (ADNOC) Drilling and ADNOC Logistics & Services (L&S), also outperformed. Disappointingly, large caps in the Middle East region, mostly consisting of banks, had a mediocre year. Investors were concerned that liquidity would not support market growth and faster repricing of deposits rather than loans will create challenges for earnings momentum. In addition, the Petrochemical sector is suffering global competition from Asia, mostly Chinese players. When new names were listed with realistic prices and clear dividend policies, this created anchor valuations and helped the new issues experience strong gains in early trading.

Investment strategy

We aim to meet the Company's investment objective of maximising total return from investments in EMEA markets by identifying high quality businesses with high expected returns and the capacity to compound earnings, and generate sustainable dividends, over the long term. This includes companies with the potential to grow due to their positions as national or global market leaders. However, we aim to buy stocks at reasonable prices, so recent acquisitions have a value tilt. We adopt a bottom-up stock selection process, drawing on the in-depth fundamental analysis of JPMorgan's Emerging Markets and Asia Pacific (EMAP) equity research team, which includes assessments of the longevity of a business's investment case, and the quality of its management and governance practices.

Our investment approach is permeated by three broad themes:

Commodity sensitivities: EMEA countries are rich in a variety of commodities - not only oil and gas, but also platinum, gold and copper. We are especially interested in companies with exposure to the global transition to renewable energy. For example, the Company is invested in global mining gold company AngloGold Ashanti. Other portfolio holdings driven by the commodities theme include Motor Oil Hellas, a Greek energy company, MOL (Hungarian refinery), ARAMCO (The 'Oil company of the world') and several industrial companies including Saudi Basic Industries Corporation, a fertiliser producer, and Sahara Petrochemical Company.

Mass market consumption: Sixty percent of the population of EMEA countries is less than 25 years old, and this percentage is forecast to continue rising. The youthfulness of the population is a major boon for consumption, as this demographic is tech savvy and thus easy for digital marketers to access, and younger people have a higher propensity to spend than older generations. As incomes across EMEA regions are relatively low by global standards, we look for companies selling affordable products which are differentiated from their competitors by their strong branding and customer service. Many day-to-day household spending decisions are made by women, so companies focused on products of potential interest to them are another focus. Leejam Sports, a Saudi Arabian company specialising in women-only gyms, is one portfolio holding driven by this theme. The company's innovative, female-focused approach is proving very popular, with new gyms fully subscribed as soon as they open. Other portfolio holdings underpinned by this theme include two pharmaceutical companies, South Africa's Clicks and Hungary's Richter. Clicks focuses on pharmacy, health and beauty items, while Richter specialises in women's healthcare and wellbeing products.

Technology adopters: Many EMEA countries, especially in Africa, are dogged by structural challenges which can often seem intractable, given the economic and fiscal constraints and political uncertainties endemic in the region, so we seek out companies that are able to 'leapfrog' these challenges, or provide much-needed consumer services which the market, or governments, have otherwise failed to supply. For example, Vodafone is empowering consumers in many EMEA countries with electronic payments systems and mobile access to banking and insurance services, including in remote areas, thereby removing the need for customers to travel long distances to access these services. Other portfolio holdings motivated by this theme include telecoms companies such as Kenya's Safaricom and South Africa's MTN, Capitec, a South African bank, and two Polish companies, InPost, and STS Holdings. InPost operates an e-commerce platform providing parcel delivery services, while STS is an on-line sport betting company.

How have specific sectors and stocks fared over the review period?

Telecommunications companies, including our positions in Arabian Contracting Services, Emirates Telecoms and MTN Group were surprisingly strong, thanks to continued growth in subscriptions, which lays the basis for improved profitability. This sector was the most significant contributor to returns over the period.

Consumer discretionary names also enhanced returns, due in part to our positions in some mid-cap consumer names, including Al Arabia and ELM. The share prices of both these companies more than doubled over the period. Our holdings in Greek companies, JUMBO, a retailer specialising in toys, gifts and stationery, and OPAP, a lottery and sports betting company, also did well, as did our position in Leejam Sports. However, our holdings in other consumer companies such as Almarai, a Saudi supplier of packaged goods and African retailers Pepkor and Mr Price detracted. Our position in KRUK, a Polish credit services provider, made good contribution to our performance. It was a reflection of better profitability on operational leverage as well as geographical diversification of earnings.

Our energy sector holdings contributed to performance, due in part to our exposure to oil service names. During the year, we took the opportunities presented by the IPOs of ADES, ADNOC Drilling and ADNOC L&S, mentioned above, to acquire exposure, and all performed strongly post-listing. Our position in ARAMCO also added to returns thanks to the company's outperformance over the period, as discussed above. Elsewhere the valuation of companies providing medical care in Saudi hospitals continued to climb, and our exposure to Mouwasat Medical Services Company benefitted accordingly. However, these names are looking increasingly expensive, and we took the opportunity to take some profits on Dr Sulaiman Habib Medical Services Group.

The main detractor from performance at the sector level was utilities, due to the strong performance of ACWA Power, a Saudi provider of electricity and water desalination, which was climbing to new highs in terms of investment multiples. The performance of financials was lacklustre, dragged down by Middle East and Polish banks. Large names underperforming, as discussed above, while small, mid-cap and peripheral banks did relatively well, thanks to Alinma Bank (Saudi Arabia) , Riyadh Bank (Saudi Arabia) as well as Halyk Bank (Kazakhstan) with Banca Transilvania (Romania). Our holdings in mid-cap Greek bank Piraeus and in Poland's insurer PZU, contributed to returns accordingly, as did our positions in Kazakhstan's KASPI and Georgian bank TBC. We were a bit slow in reducing our exposure to petrochemical holdings, particularly Sabic, the Saudi agrochemicals company, and that ultimately prevented us from adding to relative gains. Unusually high levels of global instability increased demand for gold as a safe haven. Our holdings in South African gold miners such as Gold Fields AngloGold Ashanti were a great proxy for this theme, although near term performance fluctuates in response to gold price volatility and their contribution to returns over the period was limited.

At the country level, our overweight to Greece and Kazakhstan enhanced returns, while our decision to avoid Turkey, and underweight Poland, detracted from returns due the strong relative performance of these markets, as discussed above.

Performance attribution

From 1st March 2023 to 31st October 2023

	%	%
Contributions to Total Returns From 1st March 2023
Reference Index		0.31
Asset allocation	0.6
Stock selection	3.4
Gearing/(net cash)	0.1
Investment Manager contribution		4.1
Portfolio return		4.4
Management fee/other expenses2	-2.2
Return on net assetsAPM		2.2
Effect of movement in discount over the year		7.8
Return to shareholdersAPM		10.0

Source: FactSet, JPMAM and Morningstar. All figures are on a Cum Income total return basis.

Performance attribution analyses how the Company achieved its recorded performance relative to its reference index.

Reference Index used. S&P Emerging Europe, Middle East & Africa BMI Net Return in GBP

¹     Since S&P Emerging Europe, Middle East & Africa BMI Net Return in GBP was adopted as a reference index on (1st March 2023).

²     The Ongoing Charge of 3.19% that will be published in Annual Accounts as at 31st October has been used in these calculations.

^APM Alternative Performance Measure ('APM').

Portfolio positioning

Although our investment strategy has a quality bias, the investment universe defined by our reference index is presently dominated by companies rated by JPMorgan analysts as 'trading' stocks, the lowest of their three designations of 'premium', 'quality' and 'trading'. This is in part because regional equity markets are still young, and in the early stages of development, and also because JPMorgan's analytical framework requires companies to possess a track record of at least five years before they can be rated more highly.

Another notable feature of the EMEA investment universe is that commodity names and financials feature heavily, although the index will broaden out over time as economies and financial markets develop, and we are excited about the prospect of looking deeper into these markets as they evolve. However, despite the current market concentration around these sectors, the Company's reference index already contains more than 600 names - a much larger and more diverse investment universe compared to the very limited number of stocks previously available to us in Russia, and we see many compelling opportunities across the EMEA regions.

During the review period, in addition to our participation in several IPOs, as discussed above, we also added to our overweight in The United Arab Emirates (UAE), via the acquisition of ADNOC group names on IPOs. We opened positions in Humansoft, a Kuwaiti education company, Oredo, a Qatari telecom company, and Arabian Centres, a Saudi real estate company, on the back of company meetings and reviews of these businesses. We reinstated a position in OTE, a Greek telecom, on the view that the price correction in 1Q23 was good enough to re-enter the name but this stock has since declined due to ongoing competition and a 'price war'. However, the holding is small, so its impact on performance has been limited, and we have retained the position due to our confidence in the company's longer-term prospects.

We opened a position in Sahara International, a Saudi petrochemical producer, funded by a switch out of its competitors Borouge and Saudi Agri-Nuitriens Company. Following a meeting with Sahara, and a review of the sector, we concluded that Sahara is a better play on the sector than our previous holdings. A research trip to South Africa in June resulted in several adjustments to the portfolio, across consumer names and banks. For example, we exited TFG, Mr Price and Truworths. We also closed a position in Polish sports betting company STS Holding, in response to a buy-out offer.

At the country level, we are most positive about Greece (GR). As we discussed in the Half Year report, we view Greece as a classic rerating story - unloved and under-owned but possessing great potential, led by the country's banks, thanks to an advantageous funding arrangement provided by the European Central Bank. This arrangement has facilitated a restructuring of their corporate loan and mortgage books, which is now almost complete, and should lift bank valuations over time. We also believe the market does yet fully appreciate the progress Greece has made since the global financial crisis and we see scope for further upgrades and multiple expansion over time. Consistent with our focus on income, we also like the high dividend policies of Greek consumer companies JUMBO and OPAP, mentioned above.

We have maintained our negative view on Turkey (TR), and our caution on Poland, as discussed above, and the recent outperformance of these markets has meant that our underweights to these countries have increased proportionally. Our underweights to Kuwait (KU) and Qatar (QA) reflect our preference for Saudi Arabia and the UAE, whose markets are more liquid and transparent.

The Company's top 10 holdings can be seen on page 25 of the Company's annual report and financial statements.

Al Rajhi Bank is the largest Saudi bank, with a focus on retail business. We like the company's mortgage business for its long duration, although we have recently reduced exposure marginally, due to a decline in the share price.

ARAMCO - Saudi Arabia's oil giant. It has the lowest costs of production and will be the last man standing in the industry regardless of oil price. It has an upward scaled dividend policy with increasing distribution of profit if oil price gains rise above their expectations.

Naspers - a South African internet content and information company. We view this holding as a play on China's Tencent, which we believe is currently undervalued and likely to recover over time.

Saudi National Bank - the second largest bank in Saudi Arabia, with a focus on corporate lending. Attractive valuations and steady return on equity ('ROE') make them a national leader.

First Rand - the largest bank in South Africa, which we favour due to its very strong (+20%) return on ROE and its +7% dividend yield.

Qatar National Bank - a leading Qatari bank with an attractive valuation.

Saudi Telecom - provides exposure to trend growth in consumption spending in the Kingdom.

Standard Bank - a South African bank which we like due to its well-diversified exposure to retail and corporate banking activities.

Gold Fields - a South African gold mining company which is the portfolio's key play on the gold price.

Alinma Bank - a second tier private Saudi Arabian bank, which we favour due to its exposure to SMEs and retail clients.

Outlook

We expect inflation in the US and other developed markets to remain elevated for some time, and it is unclear when rates will begin to decline in these countries, but contrary to the consensus view, we do not expect the US to slip into recession. This should be a key positive for global investor sentiment in 2024, although investors are likely to remain somewhat cautious ahead of the US Presidential election. Within EMEA regions, we expect inflation pressures to ease in response to interest rate tightening already in place. However, higher rates suggest that in aggregate, growth in EMEA will slow in 2024, although economic prospects vary between countries. We expect the Greek economy to grow by around 2-3% over 2024, while the Hungarian economy looks set to accelerate now the government has tamed inflation. Elsewhere in central Europe, Turkey and Africa, the recovery seen in 2023 may lose momentum in 2024. It is particularly difficult to be positive about Poland's prospects, as tight fiscal policy will constrain activity, and consumer spending is unlikely to pick up the slack. We see a risk of negative surprises in this market after the relative strong performance during 2023.

In the Middle East, oil will, as ever, be the key driver of economic performance and markets. We expect oil and gas prices to firm in 2024, supported by OPEC+'s decision to cut daily output by a further 1.5 million bbl from 1st January 2024. This will reduce daily oil production by a total of 3 million bbl compared to this time last year - an unprecedented cut which will support energy companies. However, these cuts will result in slower growth in the Gulf's major oil-producing nations.

South Africa and Turkey will see key elections in Q1 2024. In South Africa, our baseline assumption is that the election will maintain the status quo, with the ANC retaining its grip on power. The market is also likely to price in this outcome, although some reduction in South Africa's country risk premium is very likely after the election. Beyond the elections, we expect GDP growth of 1.0-1.5%, although any reforms within the troubled power generation sector, which has been plagued with constant blackouts and political scandal, or in transportation, may add 0.5-1.5 percentage points to annual growth. In Turkey, municipal elections are most important as a measure of President Erdogan's political popularity, which remains relatively low in metropolitan areas. Once these elections are over, we are likely to see an acceleration of monetary tightening to address inflation pressures, and some currency devaluation. So, in contrast to the situation in South Africa, we expect to see an increase in Turkey's country risk premium in Q224. We will therefore continue to steer clear of this market in the near-term, as we await evidence of a clear improvement in the investment environment, as discussed above.

On the earnings front, we are more positive than consensus for 2023. We expect EPS to be 10-20% higher than in 2022, followed by a further 5-10% rise in 2024. Banks will lead the way, as revenues continue to rise faster than costs, thanks to elevated net interest margins. The portfolio's exposure to financials will benefit accordingly. And with banks comprising almost 40% of the index, this should prove supportive for the entire market.

Regardless of events over the coming year, we remain positive about the longer-term outlook for emerging markets in Europe, the Middle East and Africa, and we believe that these regions offer investors compelling opportunities for both growth and income, at attractive valuations. Furthermore, these markets will continue to grow and evolve very rapidly, generating new opportunities as more and diverse companies enter the investment universe.

This is very promising backdrop for our ongoing search for high quality, attractively priced investments across the region. Our confidence in the success of our quest is enhanced by the fact that it is well-supported by the depth and strength of JPMorgan Asset Management's research resources, which we believe provide us with a distinct competitive advantage, as research coverage of much of the region is still very low. The portfolio will continue to evolve over coming years as our target markets develop and deepen, and we look forward to reporting on the Company's further progress on its new and exciting journey.

We thank you for your ongoing support.

Oleg I. Biryulyov

Pandora Omaset

Investment Managers                                                                                                                 23rd January 2024

PRINCIPAL AND EMERGING RISKS

The Directors confirm that they have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. With the assistance of JPMF, the Audit Committee has drawn up a risk matrix, which identifies the key risks to the Company. These are reviewed and noted by the Board. The risks identified and the broad categories in which they fall, and the ways in which they are managed or mitigated are summarised below. The AIC Code of Corporate Governance requires the Audit Committee to put in place procedures to identify emerging risks. The key emerging risks identified are also summarised below.

Principal			Movement from
risk	Description	Mitigating activities	prior year
Investment Management and Performance
Investing in Emerging Markets	Investors should note that there are significant risks inherent in investing in emerging market securities not typically associated with investing in securities of companies in more developed countries. In terms of gauging the economic and political risk of investing in emerging markets, it frequently appears in the higher risk categories when compared with most Western countries. The value of emerging market securities, and therefore the net asset value of the Company, may be affected by uncertainties such as economic, political or diplomatic developments, social and religious instability, taxation and interest rates, currency repatriation restrictions, crime and corruption and developments in the law or regulations in emerging markets and, in particular, the risks of expropriation, nationalisation and confiscation of assets and changes in legislation relating to the level of foreign ownership. Such factors may lead to a reduction in the size of the Company's net assets and it becoming unviable. Russia's invasion of Ukraine on 24th February 2022 led to the realisation of some of the above risks and Russia becoming a pariah state for western investors. The conflict between Israel and Palestine from October 2023 has increased the possibility of further instability in the region.	Following Russia's invasion of Ukraine on 24th February 2022, the prohibition of trading of Russian securities, prohibition on the receipt of dividends and reduction in the value of the Company by circa 95% led the Board to propose a shareholder resolution to widen the Company's investment objective and permit investments in Emerging Europe, Africa & Middle East. Shareholders approved the widening of the Company's investment objective on 23rd November 2022 and the Company acquired shares under its new investment objective in the first quarter of 2023. The Board also temporarily suspended its dividend payment policy and the Company's financial statements no longer reflect dividends receivable from the Company's Russian stocks. The Board's activities also included reviewing the value of the Company's portfolio, discount/premium to share price, sanctions, counter-parties status, inability to trade stocks and review of investment strategy.	è
Share Price Discount to Net Asset Value ('NAV') per Share	If the share price of an investment trust is lower than the NAV per share, the shares are said to be trading at a discount. The widening of the discount can be seen as a disadvantage of investment trusts which could discourage investors. Although it is common for an investment trust's shares to trade at a discount, particular events can negatively impact market sentiment. Due to the substantial reduction in the book value of the Company's assets following Russia's invasion of Ukraine the Company's shares have traded at a premium.	The prohibition of trading of securities in Russian companies held in the Company's portfolio which was introduced following Russia's invasion of Ukraine on 24th February 2022 led the Board to suspend its share buy back policy. In addition the Board has withdrawn its commitment to provide a tender offer based on performance of the Company against the RTS benchmark in the five year period to 31st October 2026. In normal market conditions the Board monitors the Company's discount level and seeks, where deemed prudent, to address imbalances in the supply and demand of the Company's shares through a programme of share buybacks. For details of the Company's Continuation Vote, including recent updates, see Key Features at the front of this document.	è
Investment Under-performance and Strategy	An inappropriate investment strategy, for example asset allocation may lead to underperformance against the Company's reference index and peer companies.	Following Russia's invasion of Ukraine on 24th February 2022, the prohibition of the trading of Russian securities led to the closure of the Russian market to the Company and its peers together with the cessation of reporting of benchmark data by western news companies. The Board managed these unprecedented events by keeping regularly updated regarding compliance with sanctions and ensuring sufficient liquidity in order to maintain a going concern basis. The Board also waived the Company's current investment guidelines to help address the unprecedented market conditions. In normal market conditions, the Board manages these risks by diversification of investments through its investment restrictions and guidelines, which are monitored and reported on by the Manager. The Manager provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the investment managers, who attend all Board meetings, and reviews data which show statistical measures of the Company's risk profile. Following adoption of the new mandate the board re-commenced this process for its new investments. The Company amended its investment objective in the period to widen its investment to include Emerging Europe, Middle East and Africa. Possible actions that the Board may consider to address underperformance include changing the portfolio manager or selecting another manager.	è
Failure of Investment Process	A failure of process could lead to losses.	The Manager mitigates this risk through internal controls and monitoring. Fraud requires immediate notification to the Board and regular reports are provided on control processes.	è
Loss of Investment Team or Investment Manager	The sudden departure of the investment manager or several members of the wider investment management team could result in a short term deterioration in investment performance.	The Manager takes steps to reduce the likelihood of such an event by ensuring appropriate succession planning and the adoption of a team based approach, as well as special efforts to retain key personnel. The Board engages privately with the investment managers on a regular basis.	è
Market and Financial	The Company's assets consist of listed securities and it is therefore exposed to movements in the prices of individual securities and the market generally. The financial risks faced by the Company include market price risk, interest rate risk, foreign currency risk, liquidity risk and credit risk.	In normal market conditions the Board considers asset allocation and stock selection on a regular basis and has set investment restrictions and guidelines, which are monitored and reported on by the Manager. During the current period of prohibition on the trading of Russian securities, a fair value valuation method involving a 99% provision against the Company's Russian investments is applied. Further details are disclosed in note 20 on pages 81 to 86. The Manager regularly monitors the liquidity of the portfolio including determining the market valuation of securities held, the average daily volume and number of days to liquidate a holding.	è
Operational Risks
Cyber Crime	Disruption to, or failure of, the Manager's accounting, dealing or payments systems or the Depositary or custodian's records could prevent accurate reporting and monitoring of the Company's financial position. Under the terms of its agreement, the Depositary has strict liability for the loss or misappropriation of assets held in custody. See note 20(c) for further details on the responsibilities of the Depositary.	Details of how the Board monitors the services provided by JPMF and its associates and the key elements designed to provide effective internal control are included within the Risk Management and Internal Control section of the Corporate Governance report on page 51 of the Company's annual report and financial statements. The threat of Cyber attack is increasing and regarded as having the ability to cause equivalent disruption to the Company's business as more traditional business continuity and security threats. The Company benefits from JPMorgan's Cyber Security Programme. The information technology controls around the physical security of JPMorgan's data centres, security of its networks and security of its trading applications are tested by independent auditors PricewaterhouseCoopers and reported every six months against the AAF standard.	è
Counterparty Risk	Local broker counterparty failure resulting in loss of stock/money.	The Manager monitors counterparty exposures closely and has set limits according to various criteria (including an assessment of financial stability of counterparty). The Board receives information relating to counterparties.	è
Regulatory Risks
Board Relationship with Shareholders	The risk that the Company's strategy and performance does not align with shareholders expectations.	The Manager addresses this by the organisation of an email address on the Company's website whereby shareholders can raise questions. Feedback from shareholders is received directly through the email address provided on the Company's website and via brokers which is fed back to the Board regularly. At a shareholding meeting on 23rd November 2022 to vote on the resolution to widen the Company's investment objective, 37.5% of shareholders voted against the proposal. As more than 20% of votes had been cast against the Board recommendation for a resolution, the Company has complied with the AIC Code of Corporate Governance and explained that has been taken to consult shareholders to understand the reasons behind the result and the actions taken.	è
Political and Economic	Changes in financial or tax legislation may adversely affect the Company. In addition, the Company is subject to administrative risks, such as the imposition of restrictions on the free movement of capital. A widening of the capital controls by the Russian Government could negatively impact the Company. The introduction of limitations on the ability of Russian companies to distribute dividends to foreign companies could materially reduce the Company's revenue and amount available for distribution to shareholders. The Company may not be able to trade Russian holdings or find a counter party to trade with.	The Manager makes recommendations to the Board on accounting, dividend and tax policies and the Board seeks external advice where appropriate. The Manager closely monitors political and economic developments and reports significant events to the Board either at scheduled meetings or when an event arises. The Board factor in the status of current political and economic developments in their decision making. See above for details of the Board's responses to Russia's invasion of Ukraine including the prohibition on trading and receipt of dividends from Russian held companies, and successful proposal to widen the Company's investment objective.	è
Regulatory and Legal	Breach of regulatory rules, including sanctions could lead to suspension of the Company's Stock Exchange listing, financial penalties, or a qualified audit report. Loss of investment trust status could lead to the Company being subject to tax on capital gains.	The Board has remained informed of the impact of the sanctions and restrictions that followed Russia's invasion of Ukraine on 24th February 2022. Moreover, the Board sought and received FCA approval for the change to its investment objective, which includes investment in Russia. HMRC also confirmed the continuation of the Company's investment trust status. The Board, with the assistance of the Manager, monitors the Company's activities to ensure that they remain compliant with the current sanctions regime including the specific requirements applicable to the Manager as a company subject to the laws of the United States of America and other jurisdictions that it operates in. The Directors seek to comply with all relevant regulation and legislation and rely on the services of its Company Secretary, the Manager, and its professional advisors to monitor compliance with all relevant requirements. The Board and its Committees reviews the status of the Company's regulatory and legal requirements at regular internals.	è
Climate risk
Climate Change	Climate change, which barely registered with investors a decade ago, has today become one of the most critical issues confronting asset managers and their investors. Investors can no longer ignore the impact that the world's changing climate will have on their portfolios, with the impact of climate change on returns now inevitable.	The Manager's investment process integrates consideration of environmental, social and governance factors into investment decisions. This includes the approach investee companies take to recognising and mitigating climate change risks. The Manager aims to influence the management of climate related risks through engagement and voting and is a participant of Climate Action 100+ and a signatory of the United Nations Principles for Responsible Investment. The Board is also considering the threat posed by the direct impact on climate change on the operations of the Manager and other major service providers. As extreme weather events become more common, the resiliency, business continuity planning and the location strategies of our services providers will come under greater scrutiny.	è
Global Crisis	A wide scale economic crisis which could be caused by a number of catastrophic events such a climate change, may cause significant reductions in the valuations of companies in the portfolio.	The Board keeps informed of economic developments and latest ESG requirements through regular updates from the Manager.	è
Global Trade Protectionism	A reduction in global trading arising from increased barriers to trade is a risk to economic growth, to investors' risk appetites and, consequently, to the valuations of companies in the portfolio.	The Portfolio Manager manages the Company's portfolio in light of ongoing current events. The Board can, with shareholder approval, look to amend the investment policy and objectives of the Company to mitigate the risks.	è
Artificial Intelligence (AI)	Advances in computing power means that AI has become a powerful tool that will impact society, with a wide range of applications that include the potential to harm. While it might equally be deemed a force for good, there appears to be an increasing risk to society from the threat posed by AI.	The Board monitors developments concerning AI as its use evolves and consider how it might threaten the Company's activities, which may include a heightened threat to cybersecurity. The Board works closely with JPMF in identifying these threats and monitors the strategies of our service providers.	è

TRANSACTIONS WITH THE MANAGER AND RELATED PARTIES

Details of the management contract are set out in the Directors' Report on page 46 of the Company's annual report and financial statements. The management fee payable to the Manager for the year was £103,000 (2022: £1,050,000) of which £nil (2022: £nil) was outstanding at the year end.

Included in note 6 on page 75 of the Company's annual report and financial statements are safe custody fees amounting to £193,000 (2022: £82,000) payable to JPMorgan Chase Bank N.A. during the year of which £96,000 (2022: £nil) was outstanding at the year end.

The Manager may carry out some of its dealing transactions through group subsidiaries. These transactions are carried out at arm's length. The commission payable to JPMorgan Securities Limited for the year was £nil (2022: £2,000) of which £nil (2022: £nil) was outstanding at the year end.

The Company was also holding cash in the JPMorgan Sterling Liquidity Fund, which is managed by JPMF. At the year end this was valued at £1,001,000 (2022: £16,981,000). Interest amounting to £207,000 (2022: £101,000) was receivable during the year of which £nil (2022: £nil) was outstanding at the year end.

Handling charges on dealing transactions amounting to £3,000 (2022: £20,000) were payable to JPMorgan Chase Bank N.A. during the year of which £5,000 (2022: £20,000) was outstanding at the year end.

Included in note 6 on page 75 of the Company's annual report and financial statements, are American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) costs of £nil (2022: £27,000) charged by the JPMorgan Chase Bank N.A.. JPMorgan Chase Bank N.A.'s cost is 'passed through' with no additional margin added.

At the year end, total cash of £39,000 (2022: £83,000) was held with JPMorgan Chase Bank, N.A.. A net amount of interest of £2,000 (2022: £1,000) was receivable by the Company during the year from JPMorgan Chase.

Full details of Directors' remuneration and shareholdings can be found on page 57 and in note 6 on page 75 of the Company's annual report and financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and financial statements, and the Directors' Remuneration Report in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) and Financial Reporting Standard (FRS) 102. Under company law the Directors must not approve the financial statements unless they are satisfied that, taken as a whole, the annual report and financial statements provide the information necessary for shareholders to assess the Company's performance, business model and strategy and that they give a true and fair view of the state of affairs of the Company and of the total return or loss of the Company for that period. In addition, to provide these confirmations, and in preparing these financial statements, the Directors must be satisfied that, taken as a whole, the annual report and financial statements are fair, balanced and understandable. In order to provide these confirmations and in preparing these annual statements the Directors are required to:

•        select suitable accounting policies and then apply them consistently;

•        make judgements and accounting estimates that are reasonable and prudent;

•        state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business

and the Directors confirm they have done so.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations the Directors are also responsible for preparing a Strategic Report, a Directors' Report, Directors' Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

Each of the Directors, whose names and functions are listed in the Directors' Report, confirms that, to the best of their knowledge:

•        the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law, give a true and fair view of the assets, liabilities, financial position and return or loss of the Company;

•        The Directors confirm that, taken as a whole, the annual report and financial statements are fair, balanced and understandable and provide the information necessary for shareholders to assess the strategy and business model of the Company; and of the total return or loss of the Company for that period.

•        That the Strategic Report and Directors Report include a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces.

The report and financial statements are published on the www.jpmeemeasecurities.com website which is maintained by the Company's Manager. The maintenance and integrity of the website maintained by the Manager is, so far as it relates to the Company, the responsibility of the Manager. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of this website and, accordingly, the Auditors accept no responsibility for any changes that have occurred to the financial statements since they were initially presented on the website. The financial statements are prepared in accordance with UK legislation, which may differ from legislation in other jurisdictions.

For and on behalf of the Board

Eric Sanderson

Chairman

23rd January 2024

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31st October 2023
	2023			2022
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Losses on investments held at fair value
through profit or loss	-	(161)	(161)	-	(360,154)	(360,154)
Net foreign currency (losses)/gains	-	(72)	(72)	-	1,293	1,293
Income from investments	641	11	652	5,927	-	5,927
Interest income	209	-	209	102	-	102
Gross return/(loss)	850	(222)	628	6,029	(358,861)	(352,832)
Management fee	(41)	(62)	(103)	(420)	(630)	(1,050)
Other administrative expenses	(467)	(30)	(497)	(431)	-	(431)
Net return/(loss) before finance costs and taxation	342	(314)	28	5,178	(359,491)	(354,313)
Finance costs	(1)	-	(1)	-	-	-
Net return/(loss) before taxation	341	(314)	27	5,178	(359,491)	(354,313)
Taxation charge	(35)	-	(35)	(864)	-	(864)
Net return/(loss) after taxation	306	(314)	(8)	4,314	(359,491)	(355,177)
Return/(loss) per share	0.76p	(0.78)p	(0.02)p	10.66p	(888.10)p	(877.44)p

STATEMENT OF CHANGES IN EQUITY

For the year ended 31st October 2023

	Called up	Capital
	share	redemption	Capital	Revenue
	capital	reserve	reserves1	reserve1	Total
	£'000	£'000	£'000	£'000	£'000
At 31st October 2021	408	193	372,107	24,307	397,015
Repurchase and cancellation of the Company's own shares	(3)	3	(2,530)	-	(2,530)
Net (loss)/return	-	-	(359,491)	4,314	(355,177)
Dividends paid in the year	-	-	-	(20,420)	(20,420)
At 31st October 2022	405	196	10,086	8,201	18,888
Net (loss)/return	-	-	(314)	306	(8)
At 31st October 2023	405	196	9,772	8,507	18,880

¹     Revenue reserve and the capital reserves form the distributable reserves of the Company and may be used to fund distributions to shareholders. See note 15 on page 79 of the Company's annual report and financial statements for details.

STATEMENT OF FINANCIAL POSITION

At 31st October 2023

	2023	2022
	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	17,370	1,918
Current assets
Debtors	882	20
Cash and cash equivalents	1,040	17,064
	1,922	17,084
Current liabilities
Creditors: amounts falling due within one year	(412)	(114)
Net current assets	1,510	16,970
Total assets less current liabilities	18,880	18,888
Net assets	18,880	18,888
Capital and reserves
Called up share capital	405	405
Capital redemption reserve	196	196
Capital reserves	9,772	10,086
Revenue reserve	8,507	8,201
Total shareholders' funds	18,880	18,888
Net asset value per share	46.7p	46.7p

STATEMENT OF CASH FLOWS

For the year ended 31st October 2023

	2023	20221
	£'000	£'000
Cash flows from operating activities
Net return/(loss) before finance costs and taxation	28	(354,313)
Adjustment for:
Net loss on investments held at fair value through profit or loss	161	360,154
Net foreign currency losses/(gains)	72	(1,293)
Dividend income	(652)	(5,927)
Interest income	(209)	(102)
Realised (loss)/gain on foreign exchange transactions	(78)	924
Realised exchange gain on Liquidity	-	524
Increase in accrued income and other debtors	(7)	(4)
Increase/(decrease) in accrued expenses	132	(107)
Net cash outflow from operating activities before dividends and interest	(553)	(144)
Dividends received	577	5,740
Interest received	209	103
Overseas withholding tax recovered	5	22
Net cash inflow from operating activities	238	5,721
Purchases of investments	(19,928)	(17,449)
Sales of investments	3,661	41,154
Settlement of currency contracts	-	-
Net cash (outflow)/inflow from investing activities	(16,267)	23,705
Dividends paid	-	(20,420)
Repurchase and cancellation of the Company's own shares	-	(2,678)
Interest paid	(1)	-
Net cash outflow from financing activities	(1)	(23,098)
(Decrease)/increase in cash and cash equivalents	(16,030)	6,328
Cash and cash equivalents at start of year	17,064	10,951
Exchange movements	6	(215)
Cash and cash equivalents at end of year	1,040	17,064
Cash and cash equivalents consist of:
Cash and short term deposits	39	83
Cash held in JPMorgan Sterling Liquidity Fund	1,001	16,981
Total	1,040	17,064

¹     The presentation of the Cash Flow Statement, as permitted under FRS 102, has been changed so as to present the reconciliation of 'net return/(loss) before finance costs and taxation' to 'net cash inflow from operating activities' on the face of the Cash Flow Statement. Previously, this was shown by way of note. Other than consequential changes in presentation of the certain cash flow items, there is no change to the cash flows as presented in previous periods.

Analysis of changes in net cash

	As at		Other non-cash	As at
	31st October 2022	Cash flows	charges	31st October 2023
	£'000	£'000	£'000	£'000
Cash and cash equivalents
Cash	83	(50)	6	39
Cash equivalents	16,981	(15,980)	-	1,001
Net cash	17,064	(16,030)	6	1,040

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31st October 2023

1.  Accounting policies

(a)     Basis of accounting

The financial statements are prepared under the historical cost convention, modified to include fixed asset investments at fair value, and in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies in July 2022.

All of the Company's operations are of a continuing nature.

The financial statements have been prepared on a going concern basis. In forming this opinion, the Directors have considered the impact of Russia's invasion of Ukraine and conflict between Israel and Palestine. They have considered the mitigation measures which key service providers, including the Manager, have in place to maintain operational resilience. The Directors have broadened the Company's investment mandate to include emerging European, Middle Eastern and African countries and concluded that this is sufficient to apply the going concern basis. The Directors have reviewed income and expense projections and the liquidity of the investment portfolio in making their assessment.

The policies applied in these financial statements are consistent with those applied in the preceding year.

2.  Dividends

(a)     Dividends paid and proposed

	2023	2022
	£'000	£'000
Dividends paid
2022 interim dividend of nil (2021: 25.0p)	-	10,311
2022 final dividend of nil (2021: 10.0p)	-	4,044
2023 interim dividend of nil (2022: 15.0p)	-	6,065
	-	20,420

(b)    Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 ('Section 1158')

The requirements of Section 1158 are considered on the basis of the dividend proposed in respect of the financial year, shown below. The revenue available for distribution by way of dividend is £306,000 (2022: £4,314,000).

	2023	2022
	£'000	£'000
2023 interim dividend of nil (2022: 15.0p)	-	6,065
2023 final dividend of 0.5p (2022: nil)	202	-
Total dividends for Section 1158 purposes	202	6,065

The final dividend proposed in respect of the year ended 31st October 2023 is subject to shareholder approval at the forthcoming Annual General Meeting. In accordance with the accounting policy of the Company, this dividend will be reflected in the financial statements for the year ending 31st October 2024.

3.  Return/(loss) per share

	2023	2022
	£'000	£'000
Revenue return	306	4,314
Capital loss	(314)	(359,491)
Total loss	(8)	(355,177)
Weighted average number of shares in issue during the year	40,436,176	40,478,765
Revenue return per share	0.76p	10.66p
Capital loss per share	(0.78)p	(888.10)p
Total loss per share	(0.02)p	(877.44)p

4.  Net asset value per share

	2023	2022
Net assets (£'000)	18,880	18,888
Number of shares in issue	40,436,176	40,436,176
Net asset value per share	46.7p	46.7p

        Status of announcement

2022 Financial Information

The figures and financial information for 2022 are extracted from the Annual Report and Accounts for the year ended 31st October 2022 and do not constitute the statutory accounts for the year. The Annual Report and Accounts includes the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

2023 Financial Information

The figures and financial information for 2023 are extracted from the Annual Report and Accounts for the year ended 31st October 2023 and do not constitute the statutory accounts for the year. The Annual Report and Accounts includes the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

For further information please contact:

Paul Winship

For and on behalf of

JPMorgan Funds Limited, Secretary - 020 7742 4000

24^th January 2024

ENDS

Annual Report and Financial Statements

The Annual Report and Financial Statements will be posted to shareholders on or around 31 January 2024 and will shortly be available on the Company's website (www. jpmeemeasecurities.com) or in hard copy format from the Company's Registered Office, 60 Victoria Embankment London EC4Y 0JP.

A copy of the annual report will be submitted to the FCA's National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The annual report is also available on the Company's website at jpmeemeasecurities.com where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found.

 

END