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Fund Manager's Update Q3 2017

2 Nov 2017 07:00

RNS Number : 3082V
Terra Capital PLC
02 November 2017
 

Terra Capital Plc

Fund Manager's Update Regarding Q3 2017

 

Legal Entity Identifier: 2138006S6U2X7L4R8V74

 

Terra Capital Plc. ('TCA' or the 'Fund'), the AIM quoted investment trust focused on investing in value opportunities globally, primarily in frontier markets is pleased to report that it has received the latest report from Terra Partners Asset Management Limited ('TPAM' or the 'Fund Manager'), covering its activities in Q3 2017.

 

The Fund Manager's update covering Q3 2017 is reproduced below.

 

Terra Partners Asset Management Limited

Portomaso Tower, 8/5A

Portomaso Avenue

St Julian's STJ 4011 MALTA

Telephone +356 2371 7000

Regulated by the Malta Financial Services Authority, Reg. No. C 56353

Registered Investment Adviser with the US Securities & Exchange Commission

 

November 2, 2017

 

Terra Partners Asset Management Limited ('TPAM' or the 'Fund Manager') presents its Third Quarter 2017 Update to shareholders regarding the activities of Terra Capital Plc. ('TCA' or the 'Fund'), an AIM quoted investment trust investing globally in value opportunities, primarily in frontier markets. The opinions expressed in this document represent the views of TPAM, the Fund Manager of TCA, at the time of its preparation. This document has been prepared from publicly available information, internally developed data and other sources believed to be reliable, and all reasonable precautions have been taken to ensure its accuracy; however, no representation or warranty about the accuracy of the information contained in, or of any omissions from, this document or any supplementary information made available to any interested party or its advisers is implied, and any liability in respect of such information or omissions is hereby expressly disclaimed.

 

Note that the information herein is not all of the information TPAM had available, or which it relied upon, when making its initial and continuing investment decisions. TPAM reserves the right to amend the information provided herein, and its opinions, at any time, and undertakes no obligation (express or implied) to provide any recipient with any further information or to correct any inaccuracies or omissions which may subsequently become apparent. Readers are advised that a fund managed by TPAM, and some officers and employees of TPAM currently own positions in TCA. This document is for information purposes only and it is not intended as an offer or solicitation regarding the purchase or sale of any security or investment vehicle.

 

Investments in Emerging and Frontier markets usually suffer from liquidity problems, and are often affected by governmental interference in the free market, local politics and vagaries in commodity and currency prices; therefore, their prices can be very volatile. This means that it can be difficult to acquire and subsequently sell the shares "noted" in TCA's portfolio. All current and prospective investors should be aware that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

 

All solicitations or offers regarding TCA are made and transacted on the public market of the AIM Section of the London Stock Exchange and occur by reference to TCA's Offering Memorandum and the document titled "Tender Offer to Purchase Ordinary Shares at the Tender Price and Restructuring and Amendment to the Directors' Incentive Plan and Change of name to Terra Capital PLC and Notice of Extraordinary General Meeting" of the April 30, 2012 (the "Circular") as amended by subsequent resolutions, primarily the one passed at the January 26, 2015 EGM. Documents are accessible on TCA's website www.terracapitalplc.com in the "Investor Centre" tab under the Documents and Announcements section of the file "AIM Rule 26". This website contains important information which may supplement, modify or differ from the information contained herein and no prospective investment decision should be considered before careful reading of documentation found on TCA's website.  

 

By accepting this document, you agree to be bound by the foregoing limitations.

 

 

TCA's 3rd Quarter 2017 Return & Portfolio

The Fund's NAV increased to $1.12 at September 30, 2017 from $1.085 at June 30, 2017, a net total return of 3.6% for the quarter.

The Fund's investment level (equity, fixed income, and hedging) increased from 85.9% as of June 30th, 2017 to 88.8% as of September 30th, 2017. These figures no longer include the uncalled capital commitment to Terra Argentine Fund, L.P. ("TAF"). In addition, TAF has been completely liquidated and the proceeds distributed back to investors apart from a small residual value still held in the fund. This increase in the level of investment is largely the result of the addition of three new positions which overshadowed the liquidation of TAF.

Specific Areas of Investment

 

Europe: The Fund's exposure to Europe decreased marginally from 22.8% to 22.7% of the portfolio. The Fund liquidated its position in X5 Retail. There were no other changes made during the quarter.

Americas: The Fund's exposure to the Americas increased from 20.8% to 21.5% and is the Fund's second largest regional exposure. The Fund increased its position in Refineria La Pampilla (Peru) and decreased its positions in NCB Group (Jamaica) and Terra Argentine Fund (Argentina).

Asia: The Fund's exposure to Asia decreased slightly from 12.8% to 12.7%. The Fund increased its positions in Summit Power (Bangladesh) and Qingling Motors (China).

Middle East: The Fund's exposure to the Middle East increased from 16.6% to 18.2%. The Fund added two new positions, National Bank of Kuwait (Kuwait) and Mezzan Holding Co. (Kuwait). It liquidated its position in Al Meera Consumer Goods (Qatar).

Africa: TCA's Africa allocation increased from 12.9% to 13.8%. The Fund increased its position in Emaar Misr (Egypt), African Oxygen (South Africa), and Nigerian Breweries (Nigeria). It added a new position in KCB Group (Kenya) and liquidated its position in Cooperative Bank (Kenya).

 

Fund Details

The following page details the Fund's holdings, changes from the prior quarter, and the total return of each company's shares over the quarter in both U.S. dollars and local currency. The numbers provided are based on TPAM's internal calculations:

 

Region

Country

Security

 Shares

 Market Value

 % of Fund

Position Change

 2Q US$ Total Return

 2Q LC$ Total Return

EUROPE

Hungary

Any Security Printing

593,457

3,031,146

4.39%

No Change

3.42%

0.45%

Kazakhstan

KCELL

397,630

2,226,728

3.22%

No Change

51.35%

51.35%

Serbia

Galenika-Fitofarmacija DP

79,115

2,093,740

3.03%

No Change

6.79%

1.86%

Macedonia

Komercijalna Banka A D Skopje

28,845

1,585,494

2.30%

No Change

11.82%

7.74%

Bulgaria

Speedy

47,518

1,257,120

1.82%

No Change

8.13%

4.39%

Italy

QF Polis Fund

1,789

1,232,185

1.78%

No Change

3.76%

0.17%

Slovenia

Gorenje Velenje

175,399

1,201,855

1.74%

No Change

-3.15%

-6.50%

Poland

Fabryki Mebli Forte

58,000

1,155,869

1.67%

No Change

-10.29%

-11.66%

Ukraine

Kernel Holding SA

61,923

943,814

1.37%

No Change

-12.88%

-14.20%

Montenegro

Crnogorski Telecom A.D.

217,624

501,347

0.73%

No Change

-6.05%

-9.30%

Estonia

Silvano Fashion Group AS

148,299

457,273

0.66%

No Change

4.10%

0.50%

Russia

X5 Retail GDR

-

-

0.00%

Liquidated

15,686,571

22.71%

ASIA

Bangladesh

Square Pharma

522,707

1,946,558

2.82%

No Change

3.30%

5.48%

Philippines

Travellers International Hotels

19,782,000

1,496,575

2.17%

No Change

10.48%

11.27%

Bangladesh

Summit Power Ltd.

2,778,534

1,332,291

1.93%

Increase

1.77%

3.92%

China

Qingling Motors

3,612,615

1,179,293

1.71%

Increase

1.95%

2.00%

Philippines

Belle Corporation

15,700,000

1,159,992

1.68%

No Change

-2.53%

-1.83%

Philippines

RFM Corporation

11,003,750

973,018

1.41%

No Change

0.40%

1.12%

China

Great Wall Motor Company

548,600

674,197

0.98%

No Change

-0.47%

-0.41%

8,761,924

12.68%

 

MIDDLE EAST

Lebanon

Blom Bank

137,672

1,748,434

2.53%

No Change

4.96%

4.96%

Qatar

Gulf Warehousing Company

99,107

1,139,090

1.65%

Increase

-10.51%

-11.02%

Oman

Bank Muscat

1,104,455

1,130,302

1.64%

No Change

5.39%

5.35%

UAE

Abu Dhabi Commercial Bank

558,000

1,078,687

1.56%

No Change

1.28%

1.28%

Bahrain

Bank of Bahrain and Kuwait

980,000

1,039,236

1.50%

No change

2.05%

2.04%

Kuwait

National Bank of Kuwait

400,000

1,007,880

1.46%

New Position

8.62%

8.71%

Bahrain

Gulf Hotel Group

704,700

962,144

1.39%

No Change

-0.95%

-0.96%

Lebanon

Solidere - GDR

114,499

889,660

1.29%

No Change

2.43%

2.43%

Oman

Oman Refreshment

175,000

865,932

1.25%

No Change

-4.71%

-4.75%

Oman

Ooredoo Oman

699,000

864,241

1.25%

No Change

5.82%

5.78%

UAE

Amanat Holdings

2,430,000

754,247

1.09%

No Change

0.00%

0.00%

Oman

Oman Cement

601,950

628,546

0.91%

No Change

-9.83%

-9.87%

Kuwait

Mezzan Holding Co.

160,000

442,355

0.64%

New Position

-1.92%

-1.76%

Qatar

Al Meera Consumer Goods

-

-

0.00%

Liquidated

12,550,753

18.17%

 

AMERICAS

Jamaica

National Commercial Bank Jamaica

4,331,719

2,942,332

4.26%

Decrease

25.36%

26.54%

Panama

Copa Holdings

12,965

1,614,531

2.34%

No Change

7.09%

7.09%

Peru

Refineria La Pampilla SA

20,834,070

1,595,014

2.31%

Increase

10.51%

11.11%

Jamaica

Jamaica Money Market Brokers

8,500,000

1,459,815

2.11%

No Change

10.38%

11.42%

Peru

Ferreycorp SAA

2,107,381

1,374,589

1.99%

No Change

17.05%

17.68%

Argentina

IRSA Inversiones y Represent. SA GDR

49,498

1,215,176

1.76%

No Change

1.78%

1.78%

Brazil

BB Votorantim FII

54,300

1,081,502

1.57%

No Change

8.69%

4.83%

Brazil

FII Vila Olimpia Corporate

34,000

943,650

1.37%

No Change

13.32%

9.29%

Brazil

SDI Logistica Rio FII

25,244

724,016

1.05%

No Change

7.14%

3.33%

Brazil

FII Torre Almirante

1,020

644,937

0.93%

No Change

19.25%

15.01%

Brazil

FII Edificio Galeria

39,200

606,013

0.88%

No Change

6.54%

2.75%

Argentina

Terra Argentine Fund All Series

16,241

0.76%

Decrease

Brazil

FDO S F Lima FII

589,582

449,209

0.65%

No Change

15.84%

11.73%

Brazil

FII Imob Projeto Agua Branca

1,800

201,425

0.29%

No Change

18.59%

14.38%

14,868,450

21.52%

 

AFRICA

Egypt

Emaar Misr for Development

7,361,000

1,372,885

1.99%

Increase

24.23%

20.96%

South Africa

African Oxygen

707,000

1,202,993

1.74%

Increase

14.35%

18.21%

Tunisia

One Tech Holding

248,305

1,197,625

1.73%

No Change

18.83%

20.50%

South Africa

Holdsport

234,426

1,155,993

1.67%

No Change

12.13%

15.91%

Kenya

KCB Group

2,867,000

1,139,021

1.65%

New Position

6.24%

5.62%

Morocco

Residences Dar Saada

60,083

1,063,404

1.54%

No Change

-1.14%

-3.62%

Burkina Faso

Onatel BF

60,809

812,822

1.18%

No Change

-17.24%

-18.04%

Tunisia

Automobile Reseau Tunisien et Services

246,934

663,550

0.96%

No Change

-14.62%

-13.42%

Tunisia

Tunisie Leasing

87,818

524,244

0.76%

No Change

-6.13%

-4.81%

Nigeria

Nigerian Breweries

833,247

382,969

0.55%

Increase

-7.36%

2.48%

Kenya

Cooperative Bank

-

-

0.00%

Liquidated

5.29%

5.49%

9,515,506

13.77%

Total Equity Holdings

61,383,205

88.86%

Total Equity Holdings

Cash

7,666,148

11.10%

Cash

Hedging

31,700

0.05%

Hedging

Total Fund

69,081,053

Total Fund

 

 

 

 

* These figures were prepared by the Fund Manager based on its internal records and calculations.

RESPECTFULLY SUBMITTED BY:

 

Terra Partners Asset Management Limited

Portomaso Tower, 8/5A, Portomaso Avenue,

St. Julian's ž STJ 4011 ž MALTA

Regulated by the Malta Financial Services Authority, Reg. No. C 56353

Registered Investment Adviser with the US Securities & Exchange Commission

 

Contact: Galileo Fund Services Limited (Administrator)

Ian Dungate or Suzanne Jones

+44 1624 692600

 

Panmure Gordon (Nominated adviser and corporate broker)

Paul Fincham or Jonathan Becher

+44 20 7886 2500

 

NOTES:

Terra Capital Plc is an AIM quoted investment trust focussed on generating high absolute returns while ensuring volatility is kept to a minimum. The fund predominantly invests in under-researched and under-valued companies. The Fund Manager targets companies that are trading at less than their intrinsic worth and so, aside from any potential growth prospects, provide scope for capital appreciation as a result of a reversion towards underlying value. Investments are also made in companies which are viewed as fair value but offer opportunities for growth at a reasonable price. Due to inherent market inefficiencies, the Fund Manager believes many such 'value' opportunities can be found in Frontier Markets and utilises in-house teams of analysts on the ground in areas of interest to investigate suitable opportunities rather than rely on third party research.

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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