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Impax Asian Env Mkt (IAEM)

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Wednesday 16 June, 2010

Impax Asian Env Mkt

Performance at month end

RNS Number : 7021N
Impax Asian Environmental Mkts Plc
16 June 2010
 



IMPAX ASIAN ENVIRONMENTAL MARKETS PLC

 

All information is at 31 May 2010 (unless otherwise stated) and unaudited.

 

DATA AND PERFORMANCE

Pricing


 

Diluted NAV (pence)

110.64

 

Undiluted NAV (pence)

112.58

 

Share price (pence)

109.00

 

Premium/(discount) (%)

(3.18)

 

Data


Total fund size (NAV) ( m)

129.4

Market capitalisation (m)

125.3

Management fee (%)

1.0

Established

23rd October 2009

Fund structure

Investment Trust

Exchange

London

Currency

GBP

ISIN Number

GB00B4M5KX38

Sedol

B4M5KX3

Bloomberg code

IAEM LN

 

 

Performance (£)

IAEM Net Asset Value*

MSCI AC Asia Pacific (ex Japan) **

FTSE EO Asia Pacific (ex Japan)**

FTSE EO  Japan**

1 month %

-6.5

-5.3

-8.2

-4.9

3 months %

+4.2

+1.2

+1.8

+0.8

Since launch

+14.9

+5.4

+6.5

+9.8

 

 

* Performance data is for undiluted NAV ex income

** Total return

 

TOP FIVE HOLDINGS

Company

Description

Country

Holding %

Xinyi Glass

General environmental

China

3.4

Lee & Man

Value added waste processing

Hong Kong

3.3

Xinao Gas

Pollution Control

China

3.3

Jain Irrigation

Irrigation

India

3.0

Delta Electronics

Industrial energy efficiency

Taiwan

2.8

TOTAL



15.8

 

PORTFOLIO ANALYSIS*

Country exposure

Instruments

 Japan

19%

ADR/GDR

 5%

China & Hong Kong

38%

Equity Common

82%

Taiwan

 7%

P-notes

10%

Korea

 9%

Cash

  3%

India

 8%



Singapore

 5%



Philippines

 5%



Thailand

 3%



Australia

 6%



 

  Sector

Company size

  Energy efficiency

33%

>$2bn

29%

  Renewable energy

20%

$200m-2bn

63%

  Waste

21%

<$200m

 8%

  Water

26%





* of funds invested as of 31 May 2010



IMPAX ASIAN ENVIRONMENTAL MARKETS PLC

 

MANAGER'S COMMENTARY (May 2010)

 

The Fund NAV fell 6.5% in May, whilst the MSCI AC Asia Pacific ex Japan index (£) fell 5.3%, the FTSE Environmental opportunities Asia Pacific ex Japan Index (EOAX) (£) fell 8.2% and the FTSE Environmental Opportunities Japan Index (EOJP) (£) fell 4.9%. The cash level at the end of the month was 3%.

 

Global equity markets declined in May as event risk outweighed continuing improvements in US economic data. Whilst the announcement of a US$1 trillion European rescue package involving both the European Union and the IMF reduced the immediate default risk, investors focussed on the impact of fiscal tightening on European growth rates and the potential for a breakup of the shared currency. The unilateral introduction of a ban on short selling in key German financial stocks increased selling pressure on the Euro and raised regulatory risk concerns. Asian markets pulled back on concerns that export growth would be negatively impacted by subdued European growth and fears that China, in seeking to control property prices and reduce inflation, could trigger a hard landing as the external situation deteriorated. In addition, markets were unsettled by growing tensions between North and South Korea as the latter accused the former of sinking a warship in March. In the Environmental sector, Pollution Control outperformed whilst the Alternative Energy and Energy Efficiency sectors underperformed.

 

In Environmental policy in China, the government announced an increase in the electricity tariff for energy intensive industries and penalties for inefficient operators. This is in order to accelerate industry consolidation and meet the energy efficiency targets. In addition, the government plans to establish 30 demonstration bases within 5 years to promote the recycling of scrap metals. The central and local governments will support the construction of the demonstration bases.

 

In Alternative Energy - Aboitiz Power (hydro IPP, Philippines) advanced driven by firm electricity prices. IAEM continued to take profits as we do not believe that the strength in electricity prices is sustainable.  Having been strong performers in April, the Fund's solar stocks underperformed in May as the weakness in the Euro led to FX losses and concerns about profitability. The Company reduced its exposure to the solar sector by selling out of the relatively expensive position in Suntech. Subsequently, Suntech reported disappointing results. Taewoong (wind components, Korea) underperformed as the company reported weaker than expected operating margins and delayed the build out of the electric arc furnace. Globally, wind orders have failed to recover putting pressure on component profitability.

 

In Energy Efficiency - Rinnai (efficient water heaters, Japan) and Yamatake (industrial automation and building controls, Japan ) outperformed as these businesses  are domestically focussed and not negatively impacted by the strengthening Yen. In contrast, Daikin (energy efficient air conditioners, Japan) declined as the Yen strength hurt the prospects for exports. Wasion (smart meters, China) rallied as the company performed better in the third centralised tender for smart meters and announced a strategic cooperation framework with Siemens Ltd, China. China Automation (industrial and rail automation, China) and China High Precision (industrial automation, China) fell as investors became concerned about the macro outlook in China.

 

In Waste - Air Water (industrial gases, Japan) rose as the company announced better than expected results and raised their forecasts for the current year on improving business conditions. Transpacific Industries (diversified waste management, Australia) underperformed in part due to the weakness of the Australian dollar in response to concerns about weakening demand for commodities and the proposal to introduce a temporary resource tax. IAEM outperformed the EOAX in this sub-sector as we do not have exposure to a number of Korean engineering companies which were particularly weak in May.

 

In Water - Utilities Thai Tap (Thailand) and Manila Water (Philippines) outperformed due to their defensive business models. China Everbright (water infrastructure, China) declined as investors anticipated the negative impact of rising interest rates on the BOT business model. In Pollution Control, Xinao Gas (energy, China) corrected after announcing that it plans to change its name to ENN Energy and diversify into other forms of fuel including Solar.

 

 

 

 

Impax Asset Management Limited

16 June 2010

 


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