LONDON (Alliance News) - Advance Frontier Markets Fund Ltd Monday said both its net asset value and share price fell steeply in the first half of its financial year, and said it plans to propose changing its name in an attempt to attract new retail demand.
Advance Frontier said its net asset value fell by 14.7% in the six months ended December 31 to USD0.8184 per share whilst its share price dropped by 18.1%.
"Advance Frontier Markets Fund saw a decline in its NAV of 14.7% during what proved to be a disappointing period for investors in frontier markets. The share price fell by 18.1% as the discount at which the company's shares trade widened to 10%. While understandable given the market environment, I expect there to be natural discount narrowing once risk appetite recovers from current depressed levels," said Chairman Grant Wilson.
Advance Frontier said the MSCI Frontier Markets Net Total Return Index declined by 11.7% over the period while the MSCI Emerging Markets Net Total Return Index declined by 17.4%. However, it also said it does not benchmark itself against those indexes, calling them a "point of reference".
Back in September, Advance Frontier said its investment manager, Aberdeen Emerging Capital Ltd, was acquired by Aberdeen Asset Management PLC, which was completed in December.
On Monday, Advance Frontier said it will now propose changing its name to Aberdeen Frontier Markets Investment Co Ltd in an attempt to attract new retail demand. Shareholders will vote on the change at an extraordinary general meeting on April 14.
"We believe that there are benefits that will accrue from Aberdeen's high profile and good reputation, notably in attracting additional retail demand for the company's shares," said Advance Frontier.
Importantly, shareholders will vote on whether to realise their investment in Advance Frontier at the annual general meeting in December 2016, and the company said this will be offered to shareholders every five years.
"The board has held a number of meetings with its advisors with regards to these proposals and a broad shareholder consultation exercise will take place during March and April of this year," said Advance Frontier.
"Frontier markets have endured a difficult period of performance, as investors globally have chosen to eschew risk assets in the face of rising global uncertainty. Whilst recent returns from frontier markets have been disappointing, your investment manager argues that volatility can present opportunities for long term investors," it added.
Advance Frontier shares closed up 0.4% to 48.46 pence per share on Monday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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