(Alliance News) - UIL Ltd on Monday reported a drop in net assets over the first half, with the investment company blaming the strength of the pound.
At December 31, the Bermuda-based investment company's NAV per share stood at 350.00 pence, compared to 369.57p at January 31, a 5.3% drop.
UIL's net assets slipped 7.7% over the first half to GBP301.6 million from GBP326.3 million.
UIL's NAV return in the first half was a 4.3% loss, compared to the FTSE All-Share gaining 5.5% in the same six-month period.
"Much of this underperformance is due to stronger sterling, which was up 4.1% against the US dollar and 3.9% versus the Australian dollar," UIL said.
Overall, the company said, UIL's portfolio lost GBP21.5 million in value due to the strong pound.
Charles Jillings, from UIL's investment manager ICM Investment Management, said: "In the annual report for the year to June 30, we noted that, volatility had returned to equity, currency, debt and commodity markets. We are conscious that this volatility is impacting all asset classes, with global GDP growth softening and debt continuing to rise across the world's economies."
He continued: "Regardless of the broader market environment, we remain bottom up investors looking for compelling value. This focus on the individual businesses should, over the longer term, deliver above average returns. However, markets will dictate carrying values in the shorter term."
Looking ahead, Chair Peter Burrows is "cautious" about the outlook for markets in the coming months due to the deadly outbreak of the coronavirus in China and the UK's new position of having to seek out global trade deals.
"Against the above backdrop, stock selection is of increasing importance and the Investment Managers' relentless bottom up approach to investment, should benefit UIL's portfolio," Burrows added.
Shares in UIL were untraded in London on Monday, but last closed at 230.10 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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