Interim Management Statement

RNS Number : 5614H

Templeton Emerging Markets IT PLC

23 February 2010

 

Templeton Emerging Markets Investment Trust PLC ("the Company")

Interim Management Statement

For the three months ended 31 January 2010

This interim management statement relates to the period 1 November 2009 to 31 January 2010 and is the Company's second interim management statement for the eleven month financial period ending 31 March 2010, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.

OBJECTIVE

The Company's investment objective is to provide long term capital appreciation for its investors through investment in companies operating in emerging markets or whose stocks are listed on the stock markets of such countries.

FINANCIAL POSITION

	As at 31 Jan 2010 (unaudited)	As at 31 Oct 2009 (unaudited)
Total assets (Cum-income)	£1,739.4m	£1,612.7m
Total assets (Ex-income)	£1,729.6m	£1,604.7m
Net asset value (Cum-income)	527.2p	488.6p
Net asset value (Ex-income)	524.2p	486.2p
Share price	485.5p	455.1p
Discount (Cum-income)	7.9%	6.9%
Discount (Ex-income)	7.4%	6.4%

Share price is at the UK market closing mid price.

Net asset value is at closing bid prices. Assets are priced at local close or adjusted for fair value at US Eastern market close.

Further information can be found at www.temit.co.uk.

FINANCIAL PERFORMANCE

Performance to 31/01/10 Share price Net asset value MSCI Emerging Market Index

1 Month % -7.4 -5.3 -4.8

3 Months % +6.7 +7.9 +5.3

1 Year % +84.6 +85.1 +62.5

3 Years* % +17.8 +17.7 +10.9

5 Years* % +24.8 +23.3 +18.3

Share price Net asset value MSCI Emerging Market Index

Year to 31 Jan 2010 % +84.6 +85.1 +62.5

Year to 31 Jan 2009 % -33.1 -34.8 -31.0

Year to 31 Jan 2008 % +32.8 +35.2 +21.8

Year to 31 Jan 2007 % +6.8 +5.1 +7.1

Year to 31 Jan 2006 % +72.0 +62.5 +58.3

* = Annualised rate of return

All figures are calculated in Sterling on a total return basis i.e. with net dividends reinvested

Source: Franklin Templeton Investments / Copyright - © 2008 Morningstar, Inc.  All rights reserved.

           MARKET VOLATILITY AND OUTLOOK

Emerging markets experienced some volatility towards the end of the three month period to January 2010. This resulted from concerns about the strength of the global recovery; China's tightening policies to curb overheating in certain sectors; Greece's high debt levels and a proposal from U.S. President Barack Obama to spilt major investment banks, affecting profitability. In terms of currencies, the largest contributors to relative performance were the Fund's investments in the Brazilian and Russian ADR shares which are denominated in US dollars as opposed to holding the domestic shares because both the Brazilian Real and Russian Ruble weakened against the Pound Sterling while the US dollar remained relatively unchanged. Between 31 October 2009 and 31 January 2010, the net asset value of the Company increased by 7.9% to 527.2 pence. The Investment Manager (Templeton Asset Management Ltd.) however continues to see emerging markets benefiting from relatively good growth prospects, attractive valuations and solid fundamentals and will continue to monitor the markets for favourable investment opportunities.

MATERIAL EVENTS AND TRANSACTIONS

There are no material events to report from the period 1 November 2009 to the date of this statement.

SHARE BUY BACKS

During the three month period to 31 January 2010, the Company bought back and cancelled 105,000 shares (0.03% of the issued share capital) for a total consideration of £519,191.

           INVESTMENT PORTFOLIO UPDATES AND OTHER COMPANY NEWS

The Company has continued its efforts to keep shareholders informed about their investments in TEMIT.  The Investment Manager held its quarterly portfolio web conference on 25 January 2010. Recordings and written transcripts of these calls are available from the Company's website - www.temit.co.uk.

Stock Exchange Announcements, Quarterly Manager's Reports, Factsheets and Investment Manager's Commentaries are sent to subscribers to the email service on the Company website.  The website is also updated daily with the latest prices and Company news.

The interim results for the six months to 31 October 2009 were released on 11th December 2009 and the quarterly portfolio insight report for the three months to 31 December 2009 was released on 22 January 2010.

           PORTFOLIO CHANGES

The Investment Manager reports the following principal changes in the portfolio:

Top Purchases (total value £4.7m)

MCB - Financial

MCB is the fourth largest bank in Pakistan.  The Company increased its exposure because of its attractive valuations and relatively high return on equity.

Petrochina - Energy

Petrochina is China's largest oil and gas company in terms of reserves.  Our holding was increased as the company is a beneficiary of the long-term uptrend in oil prices.      

Top Sale (total value £2.3m)

Compal Communications

Compal is the largest handset manufacturer in Taiwan.  Our holding in Compal was sold due to intensive competition and the weakening market position of one of its major customers.

Geographic Allocation

	% of net assets as at 31 Jan 2010	% of net assets as at 31 Oct 2009
LATIN AMERICA
Brazil (including US listings)	20.9	22.9
Mexico	2.0	1.6
ASIA
China / Hong Kong	20.9	19.9
India	13.4	12.4
Thailand	8.4	8.9
Indonesia	6.3	5.9
South Korea	5.6	5.9
Pakistan	1.4	1.3
Taiwan	0.3	0.5
EUROPE
Turkey	6.9	6.5
Russia (including US listings)	6.4	6.4
Poland	1.8	1.8
Hungary	1.3	1.3
Austria	1.0	1.2
AFRICA (SUB-SAHARA)
South Africa	2.7	2.8
TEMIT's other current assets	0.7	0.7
	100.0	100.0

Sector Allocation

	% of net assets as at 31 Jan 2010	% of net assets as at 31 Oct 2009
Financial	25.6	26.2
Materials	21.1	21.2
Energy	19.7	21.7
Consumer Discretionary	12.8	10.8
Utilities	5.9	5.8
Information Technology	4.3	3.9
Industrials	4.0	4.0
Telecommunication Services	3.0	2.9
Consumer Staples	2.9	2.8
TEMIT's other current assets	0.7	0.7
	100.0	100.0

 Top Ten Holdings

Country	Security	Sector	% of net assets as at  31 Jan 2010	% of net assets as at  31 Oct 2009
Brazil	Itau Unibanco Banco Multiplo SA, ADR	Financial	5.9	6.2
Brazil	Cia Vale Do Rio Doce SA, ADR	Materials	5.9	6.3
India	Sesa Goa Ltd.	Materials	5.5	5.0
Turkey	Akbank	Financials	4.7	4.6
Brazil	Banco Bradesco SA	Financials	4.7	5.4
Brazil	Petroleo Brasileiro SA	Energy	4.4	5.1
India	Tata Consultancy Services Ltd.	Information Technology	3.4	3.0
China	Denway Motors Ltd.	Consumer Discretionary	3.4	3.0
China	PetroChina Co Ltd.	Energy	3.2	3.5
Hong Kong	VTech Holdings Ltd.	Telecommunication Services	3.0	2.6

The securities used to calculate the above NAV and industry percentages have been valued on a bid basis: the valuation of the assets is as at each local market close or, where appropriate, adjusted for changes in the fair value of these assets at US close.

This Interim Management Statement has been produced solely to provide additional information to shareholders of the Company to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied upon by any other party or for any other purposes. In addition, the views, information and data in this publication should not be deemed as a financial promotion or recommendation.

Other than described above, the Board is not aware of any events during the period from 1 November 2009 to the date of this statement which would have had a material impact on the financial position of the Company.

 
Issued on behalf of the Board
Sara A MacIntosh
for and behalf of Franklin Templeton Investment Management Limited
Secretary

Date: 23 February 2010

End of interim management statement

For further information please contact Client Dealer Services at Franklin Templeton Investment Management Limited on UK freephone 0800 305 306 or [phone] for overseas investors.

 

END

 

 

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