Interim Management Statement

RNS Number : 2773H

Genesis Emerging Markets Fund Ld

15 May 2014

 



 Genesis Emerging Markets Fund Limited ("the Fund"; "the Company")

Interim Management Statement (unaudited)

for the three-month period ended 31^st March, 2014

This Interim Management Statement relates to the period 1st January 2014 to 31^st March 2014 and is the Fund's second interim management statement for the financial year ending 30^th June 2014, as required by the UK Listing Authority's Disclosure and Transparency Rule 4.3.

Investment Objective

The investment objective of the Fund is to provide shareholders with a broadly diversified means of investing in developing countries and immature stock markets, and thus to provide access to superior returns offered by high rates of economic and corporate growth, whilst limiting individual country risk.

Financial Position

	As at 31st March 2014 (unaudited)	As at 31st December 2013 (unaudited)
Total Net Assets	£742 million	£747 million
Net Asset Value per share	549.8p	553.3p
Share Price	493.0p	500.5p
Share Price Discount	-10.3%	-9.5%
Market Capitalisation	£665 million	£676 million
Participating preference shares in issue	134,963,060	134,963,060

Financial Performance

Performance to 31st March 2014 in GBP	Q1	1 Year	3 Years*	5 Years*	10 Years*
	%	%	%	%	%
Share Price	(1.5)	(14.3)	(2.5)	15.3	14.0
Net Asset Value	(0.6)	(9.0)	(1.3)	15.6	13.8
MSCI EM (TR)	(1.0)	(9.8)	(3.8)	11.4	11.5

* Annualised rate of return

Fund performance - Genesis' own records. NAV to NAV. Net of all expenses, including management fees and tax suffered. Net income reinvested. Index performance - calculated by Genesis based upon index values supplied by MSCI.

Ten Largest Holdings (at 31^st March 2014)

	%
Taiwan Semiconductor (Taiwan)	5.4
Anglo American (South Africa)	4.7
Samsung Electronics (South Korea)	4.6
SABMiller (South Africa)	3.6
First Quantum Minerals (Zambia)	2.7
Tullow Oil (UK/Africa)	2.6
Samsung Fire & Marine (South Korea)	2.1
Novatek (Russia)	2.0
Santander Brasil (Brazil)	1.9
Sun Pharmaceutical (India)	1.7

Geographical Diversification (at 31^st March 2014)

	%
Latin America	12.4
Brazil	5.7
Mexico	4.4
Other Latin America	2.3
Asia	49.8
China	12.5
India	12.4
South Korea	9.0
Taiwan	7.0
Thailand	4.7
Indonesia	2.3
Other Asia	1.9
Middle East/Africa	23.4
South Africa	11.9
Zambia	2.7
UK (Tullow Oil)	2.6
Nigeria	2.1
Egypt	1.4
Other Middle East/Africa	2.7
Europe/Central Asia	12.5
Russia	6.6
Turkey	2.9
Other Europe/Central Asia	3.0
Cash	2.0

Investment Environment and Outlook

Despite gains in February and March, a loss of 5.7% in January - caused by the US Federal Reserve continuing to trim its bond buying programme - resulted in the MSCI EM Index falling 1.0% (in Sterling terms) over the first quarter.

Against this backdrop, the Company's Net Asset Value per share fell from 553.3p on 31^st December 2013 to 549.8p on 31^st March 2014; a loss of 0.6% over the three-month period.

The better investment climate in February and March reflected a slight lowering - at the time - of the international tension with regard to the situation in the Black Sea (sanctions against Russia targeting specific individuals and entities, with only a limited impact on the broader economy) and patchily-weak economic data from China being taken positively by investors expecting the government to announce a stimulus package. India, Indonesia and South Africa, problematic markets in 2013, all announced positive trade and current account figures, and were rewarded with positive currency movements, while the Chinese yuan weakened a little against the US dollar on announcement of a widening of its permitted trading band in the middle of March.

A recovery in the developed world led the IMF to revise up its growth projections for 2014 for the US, Japan and China, and the general expectation for developing country growth is 5.1% this year and 5.4% next. The IMF said in its most recent World Economic Outlook that China has 'moderate' growth prospects of around 7.5% for 2014 due to an acceleration in investment. This may be on the positive end of the scale, and of course growth in China is slowing as the base effect takes hold; in US dollars China's economy expanded by US$1 trillion in 2013 while the US economy grew by just US$500 billion.

Material Events and Company News

There are no other material events to report from the period 1^st January 2014 to the date of this statement.

In addition to the Half-Year Report which was sent to investors in March, the Fund has continued its efforts to keep shareholders informed about their investment. On a monthly basis, a factsheet is posted to the Investment Advisor's website, www.giml.co.uk.

This Interim Management Statement has been produced solely to provide additional information to shareholders of the Fund 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 other than as stated above. 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^st January 2014 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

JPM Administration Services (CI) Limited, Guernsey

Secretary

Date: 15^th May 2014

Enquiries

John Mayne/ William Simmonds - 020 7588 2828

J.P. Morgan Cazenove

Coen Teulings (Chairman) - 020 7201 7200

Genesis Emerging Markets Fund Limited

Jonathan Snow - 020 7201 7200

Genesis

 

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