LONDON (Alliance News) - Genesis Emerging Markets Fund Ltd Monday said its net asset value fell in its recently-ended financial year due to reduced investor appetite in a tough political and economic environment.
The company said its NAV in the year ended June 30 fell to GBP771.4 million from GBP780.1 million the year before, as its NAV per share declined to GBP5.72 from GBP5.78.
It said that performance was hit by local political issues in countries such as Brazil and Russia, as well as global economic issues such as China's slowing growth rate, which reduced investor appetite for emerging markets.
"The outlook for equity investments in emerging markets remains uncertain. It has been apparent for some while that the companies that in aggregate make up the fund's (potential) holdings continue to face a number of challenges and the prospect of lower profitability as competition increases and more obvious business penetration opportunities gradually decline," Chairman Coen Teulings said in a statement.
"China's growth - and its impact on the rest of the world - remains a headline concern. It is also true that historically US interest rate "normalisation" tends to be associated with crises in emerging markets - and, sadly, not enough countries have implemented the necessary reforms over the mostly benign environment of the last decade that may have mitigated the heightened risks," he added.
"All that said, we continue to share the manager's confidence in the high quality of the companies invested in by the fund, and their potential to generate returns for shareholders over the next several years," he said.
Shares in Genesis closed down 3.3% at 430.00 pence on Monday.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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