11 October 2024

UTILICO EMERGING MARKETS TRUST PLC

(LEI Number: 2138005TJMCWR2394O39)

Publication of monthly factsheet

The latest monthly factsheet for Utilico Emerging Markets Trust plc ("UEM" or the "Company") will shortly be available through the Company's website at:

https://www.uemtrust.co.uk/investor-relations/factsheet-archive

Monthly commentary

PERFORMANCE

UEM's NAV total return was marginally down in September by 0.1%, weaker than the performance of the MSCI Emerging Markets total return Index which was up by 4.4% in Sterling terms in the month.

Global markets in September ended the month on the whole in positive territory. The US market (the S&P Index) ended the month up by 2.0%, despite witnessing a slow start on the back of softer macro data. Retail sales and new home sales weakened, nonfarm payrolls rose less than expected and private consumption expenditure growth was revised lower. The market however was driven by the long anticipated start of the US Federal Reserve rate cutting cycle. The outsized interest rate cut of 50bps, the first rate cut since 2020 bringing rates to 4.75-5.0%, helped to push the US market higher. The European central bank also lowered its interest rate by 25bps as the European economic outlook deteriorated whilst the Bank of England held rates.

The Chinese market started the month sluggishly as retail sales and industrial production all continued to slow. However, on 24 September the Chinese central bank, the PBoC, announced a number of measures to revive growth. These included lowering the seven day reverse repo rate and lowering mortgage rates as part of its stimulus measures.  The epic stimulus package helped to boost the markets with the Hang Seng and Shanghai Composite Index both recovering at the end of the month, up by 17.5% and 17.4% respectively.

The easing of the US and Chinese monetary policy helped many emerging markets deliver solid market performances during the month. The Philippines PSEi Index was up by 5.4%, benefitting from the Philippines central bank cutting interest rates as inflationary pressures continue to trend downwards, whilst the Thailand Set Index was up by 6.6%. The Indian Sensex Index was up by 2.3% as macro conditions remain favourable.

Brazil was one of the outliers for the month with the Bovespa Index down by 3.1%. The Brazilian central bank bucked the trend witnessed in most countries and raised interest rates. The Selic rate increased in September by 25bps, the first time in over two years, to 10.75% with the central bank indicating that there are more increases ahead as they tackle a challenging inflationary outlook driven by stronger than expected economic activity. Further, the Brazilian market was not helped by concerns around the government loosening fiscal discipline. The Turkish market, the Borsa Istanbul Index, was also down by 1.7% as inflation continues to run higher than expected complicating the outlook for monetary policy decisions.

PORTFOLIO

There was one change to the top thirty holdings in September, Vietnam Holding Ltd ("VNH") replaced China Datang due to share price performance of VNH as well as a reduction of position in China Datang.

VNH is a closed-end fund that invests in high-growth companies in Vietnam, focusing on domestic consumption, industrialisation and urbanisation. During the month, its share price was up by 7.0%.

The portfolio had mixed performances in September. Strong performers included three Chinese companies, Shanghai International Airport, Sunevision and China Gas, up by 16.0%, 13.1% and 9.4% respectively benefitting from the recently announced Chinese stimulus policies. Santos Brasil, also saw its share price increase by 13.8% as it was announced that CMA CGM will acquire a 48% stake in the Brazilian port operator and launch a public offer for the remaining shares.

Share price weakness during the month was seen within some of the Brazilian holdings, affected by the local domestic negative investor sentiment and higher interest rates expectation. JSL was subsequently down by 11.0%, Rumo was also down by 8.5% and Eletrobras down by 5.3%.

Portfolio purchases amounted to £12.8m and total realisations were £10.1m.

DEBT

During the month UEM drew upon its £50m multi-currency facility with Barclays Bank. UEM's debt at the end of September increased from nil to £19.5m and was drawn in US Dollars (USD 15.0m) and Euros (EUR 10.0m).

OTHER

UEM's share price decreased in the month by 2.7%, ending September at 217.00p. The discount to NAV widened to 18.4% from 16.9%. UEM bought back 0.3m shares at an average price of 217.27p in the month, taking the total shares bought back in the six months to 30 September 2024 to 2.9m, equivalent to 1.5% of the share capital as at 31 March 2024.

The first quarterly interim dividend of 2.15p per ordinary share in respect of the year ending 31 March 2025, was paid on 27 September 2024 to shareholders on the register on 6 September 2024.

Name of contact and telephone number for enquiries:

ICM Investment Management Limited                              +44(0)1372 271486

Charles Jillings / Alastair Moreton

Montfort Communications

Gay Collins, Pippa Bailey                                                       +44(0)20 3770 7913

utilico@montfort.london