Interim Management Statement

RNS Number : 3178X

Utilico Emerging Markets Limited

13 February 2012

 



Utilico Emerging Markets Limited

Interim Management Statement

31 December 2011

Quarterly Management Review

Utilico Emerging Markets Limited ("UEM") published its interim report and accounts for the period to 30 September 2011 on 24 November 2011. UEM has published monthly fact sheets on its website: www.uem.bm.

Set out below is the interim management statement ("IMS") for the period from 1 October 2011 to 31 December 2011 containing information that covers this period, and up to the date of publication of this IMS.

Performance

Equity markets showed some recovery over the three months. The MSCI Emerging Markets Total Return Index (Sterling adjusted) was up 4.7% over the period, underperforming the UEM net asset value cum income total return which was up 6.5%.

Dividends

UEM paid its interim dividend of 3.75p on 16^th December 2011.

Portfolio

UEM's gross assets less current liabilities (excluding debt) at the beginning of the period under review were £341.6m and increased by £10.2m to £351.8m at the end of December 2011. Ordinary shareholders funds increased by £13.4m to £342.8m.

The ten largest holdings have remained broadly the same over the three months although there have been changes in the weighting.  Eight of the ten companies had increases in share prices over the last three months.

Malaysia Airports Holdings Berhad's share price was up 8.7% along with International Container Terminal Services Inc, up 12.9%. However, Ocean Wilsons Holdings Limited, the third largest holding in the portfolio, fell 17.0%, mainly due to concerns over growth in world markets.

The remainder of the top ten's share prices were all up, with the exception of Cia de Concessoes de Rodovoarias (CCR) which remained flat.

Stock markets continued to be concerned by the Eurozone crisis over the three months to 31 December 2011. The yield on Italian debt topped 7%, a level that is widely viewed as unsustainable and "the point of no return" Proposals from the EU for a financial transaction tax were rejected by the UK and protests and violence broke out on the streets of Italy and Greece as the new governments moved forward with already unpopular austerity measures and economic reforms.

At the end of November, six major central banks announced a co-ordinated action to ease strains in financial markets by lowering the pricing on the existing US Dollar liquidity swap in order to provide liquidity support to the global financial system.

In China the deposit reserve ratio, required by major banks, was reduced in a bid to encourage lending and Brazilian interest rates were lowered for the third time in recent months.

Bank debt

During the period under review UEM reduced its bank debt from £12.2m to £9.1m. This was drawn £4.8m in US Dollars and £4.3m in Sterling.

Hedging

Put options. UEM had reduced its equity market option positions to nil at the end of September. However, during the three months the investment managers took steps to re-establish a put position. At 31 December 2011 UEM held S&P500 net put options with a value of £10.5m providing market protection of approximately £24.6m.

Migration from AIM to the official list

On 14 October 2011 UEM migrated its ordinary shares from the Alternative Investment Market ("AIM") to the official list at the London Stock Exchange and were included in the FTSE 250 Index.

Share price and NAV

UEM's share price rose from 137.00p at 30 September 2011 to 148.75p at 31 December 2011, an increase of 8.6%. UEM's discount to NAV narrowed from 10.4% at 30 September 2011 to 6.5% at 31 December 2011.

Outlook

The investment environment is challenging and is likely to remain so. A great deal of uncertainty surrounds Greece, Italy, Spain and Portugal and Eurozone leaders seem perpetually locked in crisis talks. However, UEM and emerging markets generally seem to be faring well against this backdrop of difficulties.

Capital Structure			31 December 2011		30 September 2011
Gross assets less current liabilities			£351.8m		£341.6m
Bank debt and other debt			£9.1m		£12.2m
Shareholders' funds (ordinary shares)			£342.8m		£329.4m
Effective gearing on ordinary shares			1.02x		1.03x
Ordinary Shares			31 December 2011		30 September 2011
NAV (cum income)			159.04p		152.83p
Share price			148.75p		137.00p
Discount to undiluted NAV			(6.5%)		(10.4%)
Shares in issue			215,528,793		215,528,793

Performance		31 December 2011	30 September 2011		% change
UEM NAV total return (cum income)		162.79p	152.83p		6.5%
MSCI EM  Index (Sterling adjusted) total return		1085.71	1036.99		4.7%

Sectoral Split of Investments *			31 December 2011		30 September 2011
Ports Water & Waste Toll Roads Airports Electricity Other Infrastructure  Investment Funds Gas Satellites Telecoms Other Infrastructure Renewables Infrastructure IT Post Office			23.0% 20.5% 12.2% 10.4% 10.0% 5.9% 4.4% 4.0% 3.5% 2.3% 2.1% 1.0% 0.4% 0.3%		26.4% 19.1% 11.4% 9.9% 10.4% 6.3% 4.5% 2.5% 3.1% 2.2% 1.9% 1.5% 0.5% 0.3%
			100%		100%
Geographical Split of Investments *
Brazil China Malaysia Philippines Other Asia Thailand Eastern Europe Middle East/Africa Other Latin America			30.7% 21.8% 14.8% 11.1% 9.1% 6.5% 4.1% 1.4% 0.5%		32.3% 18.4% 14.5% 13.2% 8.7% 5.8% 5.1% 1.5% 0.5%
			100%		100%

Top 10 Holdings as % of Gross Assets			31 December 2011		30 September 2011
1 2 3 4 5 6 7 8 9 10	Malaysia Airports Holdings Bhd Intl Container Terminal Services Inc. Ocean Wilsons Holdings Limited Eastern Water Resources PCL Cia Saneamento Minas Gerais (Copasa) Santos Brasil Part. Infrastructure India Tractabel Energia Cia de Concessoes Rodovoarias (CCR) Asia Satellite Telecoms		9.5% 8.8% 7.0% 6.0% 4.9% 3.2% 2.9% 2.9% 2.9% 2.7%		8.9% 10.9% 8.7% 5.5% 4.5% 3.2% 3.0% 2.6% 3.2% -

Enquiries

Charles Jillings

[phone]

 

END

 

 

IMSLLFLSFLIVLIF