Utilico Emerging Markets Regulatory News (UEM)

17 April 2023

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 increased by 3.5% in March, which was ahead of the MSCI Emerging Markets total return Index ("MSCI") which was up by 1.0% in Sterling terms. Over the past twelve months UEM has delivered a NAV total return of 2.1%, ahead of the MSCI which fell 5.0% in Sterling terms for the period.

Markets were mixed in March, with volatility spiking following the collapse of Silicon Valley Bank, the largest bank failure since the Financial Crisis over a decade ago. Swift government intervention from regulators and the Federal Bank prevented this triggering a wider banking crisis, but the incident highlights tightening liquidity and the impact that rapid rate increases are having on the financial system. The S&P 500 Index shrugged off the bad news, gaining 3.5% over the month, while in Europe the Eurostoxx was up 1.8%.

In China, economic activity continued to rebound in March, with exports growing 14.8% in USD terms. Government policymakers are re-focusing on growth prospects for 2023, easing their crackdown on technology firms and addressing liquidity issues in the property market. Hong Kong's Hang Seng Index was up 3.1% in March whilst the Shanghai Composite was down 0.2%.

In Brazil some details on the long-awaited fiscal framework started to emerge, though the Central Bank maintained rates in highly restrictive territory at 13.75% on concerns over persistent inflation. The Bovespa Index fell by 2.9% in March, whilst markets in Mexico were more upbeat on the potential nearshoring boom, with the Mexico Bolsa up 2.2%. The Chilean IPSA Index declined by 1.3%.

Markets in India were flat over the month, with retail inflation dropping to a 15-month low of 5.66% in March, below the Reserve Bank of India's upper threshold, as food inflation moderated. Meanwhile markets in Vietnam appreciated, with the Ho Chi Minh Index up 3.9%, as the Central Bank cut rates for the first time since 2020 as inflation in February fell to 4.3%, below the full-year target of 4.5%.

Sterling broadly strengthened against most currencies, appreciating by 2.1% against the US Dollar, 1.1% versus the Chinese Renminbi, and 1.5% versus the Indian Rupee. Notably it weakened against the Brazilian Real and Chilean Peso, declining by 0.8% and 3.0% respectively.

PORTFOLIO

The majority of investments in UEM's portfolio posted share price increases during March. There was one change to the top thirty holdings, following increased investment in Shanghai International Airport ("SHIA"), which replaced Ocean Wilsons. SHIA operates Pudong International and recently acquired Hongqiao Airport in Shanghai. Pre-pandemic Pudong Airport handled 76m passengers and remains well placed to benefit from the recovery of air travel demand post China's re-opening.

There were some outstanding performances in Latam, particularly in UEM's Chilean investments, with ECL and Aguas Andinas up 14.9% and 13.8% respectively. This reflects improved outlook for the beleaguered utility sector, which was impacted heavily in 2021-22 by regulatory uncertainty, cost inflation, and liquidity issues as the government sought to protect households from tariff inflation. In Mexico the standout performers were OMA and Traxion, up 15.0% and 9.3% respectively. OMA continues to benefit from the rebound in air travel, reporting 34% growth in passengers for the month of February. Meanwhile, Traxion's results for 4Q22 also demonstrated recovery in EBITDA and is seen as a beneficiary of nearshoring.

Elsewhere, notable performances were delivered by CITIC, up 11.5%, and Umeme, up 10.3%, with both companies reporting robust results and increased dividends. ICT's share price was also up by 6.7% on the back of good 4Q22 results which saw revenues up 20.7% and EBITDA up 19.9%. Inpost's share price was up by 7.4%. Negative share price performances were seen at KINX, falling 13.6%, and GSPL, down 6.9%, as both sought to consolidate gains after having hit short-term highs at the end of February.

During the month, the carrying value of Petalite, an unlisted company in which UEM is a 28.6% shareholder, was increased to the valuation of the last fundraise. This increased NAV by £9.9m.

During March, purchases for the portfolio totalled £16.8m and realisations totalled £4.7m.

DEBT

UEM's bank debt increased from £25.4m to £35.1m and was drawn as USD 18.0m, EUR 12.0m and GBP 10.0m.

OTHER

UEM's share price ended March at 217.00p, up 2.8%. The discount to NAV narrowed slightly to 13.5% from 13.7%. UEM bought back 448,061 shares at an average price of 211.56p in the month, taking the total buybacks for the twelve months to 12.5m shares at an average price of 215.45p.

UEM's third quarterly interim dividend of 2.15p per ordinary share in respect of the year ended 31 March 2023 was paid on 24 March 2023 to shareholders on the register on 3 March 2023.

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