Utilico Emerging Markets Regulatory News (UEM)

12 July 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 1.7% in June, ahead of the MSCI Emerging Markets total return Index ("MSCI") which was up by 1.1% in Sterling terms. For the first six months of the calendar year, UEM's NAV total return was 9.9%, significantly outperforming the MSCI which declined by 0.2% in Sterling terms over the same period.

Equity markets were mostly positive in June. The Federal Reserve didn't raise interest rates at its June meeting, although indicated that it was likely that additional increases in the benchmark interest rate would be appropriate in the coming months. The European Central Bank did raise interest rates by 25bps to 4.0% in June and the Bank of England surprised markets with its 50bps rise to a benchmark rate of 5.0%.

The S&P 500 Index was up 6.5% over the month, while in Europe the Eurostoxx rose by 4.3%.

China continues to experience a cooling of export demand and consumer confidence remains fragile, particularly driven by concerns about the real estate market. There was a modest 10bps cut in the People's Bank of China benchmark rate during June and with a potential risk of deflation and high youth unemployment, further stimuli to drive domestic consumption will probably be required. The Shanghai Composite Index was slightly down in June, declining by 0.1% although the Hang Seng Index did recover some of May's losses, rising by 3.7% in the month.

Brazil's stock market continues to rally strongly with the Bovespa Index increasing 9.0% over the month as investors continued to respond positively to the growing likelihood of an interest rate cut from the current 13.75% level at the Central Bank's next meeting in August. Elsewhere in Latam, the Mexico Bolsa advanced by 1.5% while the Chilean IPSA Index rose by 5.8%.

Inflation in India declined sharply in May falling to 4.25%, only 25bps above the Reserve Bank of India's target rate of 4.0%, although the monsoon season adds a level of unpredictability to the inflationary outlook. Interest rates look set to be held at the current 6.5% level for the rest of this year with economists currently expecting a modest rate cut in early 2024. The Indian SENSEX index rose by 3.3% in June. The State Bank of Vietnam cut interest rates by a further 50bps in June, taking reductions this year to 150bps, in the face of lower export demand for manufactured goods and weak sentiment towards the real estate sector. Vietnam Ho Chi Minh Index gained 4.2% for the month.

In the currency markets, Sterling and the Euro strengthened in response to interest rate rises. The US Dollar weakened with the DXY Index falling by 1.4% in the month and the US Dollar down 2.5% against Sterling. EM currencies were mixed against Sterling, with the Brazilian Real gaining 3.5% and the Mexican Peso up 0.9%. The Chinese Renminbi was noticeably weaker, declining by 4.7%, the Indian Rupee declined by 1.7% and the Vietnamese Dong declined by 2.9% against Sterling.

PORTFOLIO

There were three changes to the top thirty holdings, with Transport Trade Services ("TTS"), Engie Brasil Energia and Bolsa de Valores de Colombia ("BVC") replacing OMA, Grupo Traxion and Shanghai International Airport, primarily due to relative performance.

TTS is a Romanian operator of port and freight forwarding services principally between the Black Sea port of Constanta and river ports on the Danube. Engie Brasil Energia is a Brazilian renewable energy generator which also owns electricity and gas transmission assets. BVC operates the Colombian Stock Exchange.

Nine stocks in the top thirty gained more than 5.0% in local currency terms in June. The strongest performers in June were TTS, Omega Energia and Centrais Electricas Brasileiras which rose by 18.1%, 13.6% and 13.0% respectively. KINX and Power Grid of India both gained 9.9% for the month. Engie Energia Chile rose by 8.9%, Engie Energia Brasil by 8.6% and Rumo's share price appreciated by 6.8%.

During the month, China Datang Renewables share price declined by 7.4%, Vamos was down by 6.3% and Gujarat State Petronet decreased by 5.3%.

Purchases for the portfolio totalled £2.8m and realisations totalled £8.6m for the month of June.

DEBT

UEM's bank debt decreased from £33.9m to £21.3m and was drawn as USD 10.0m, GBP 7.5m and EUR 7.0m.

OTHER

UEM's share price ended June at 224.00p, up 2.3%. The discount to NAV narrowed to 14.0% from 15.2%. UEM bought back 458,889 shares at an average price of 223.36p in June.

UEM's fourth quarterly interim dividend of 2.15p per ordinary share in respect of the year ended 31 March 2023 was paid on 23 June 2023 to shareholders on the register on 2 June 2023.

On 27 June 2023, the ICM investment team presented to a number of private investors on the Investor Meet Company platform, you can watch the presentation on UEM's website via this link - https://www.uemtrust.co.uk/investor-relations/analyst-research.

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