Publication of Monthly Factsheet
13 March 2024
UIL LIMITED
(LEI Number: 213800CTZ7TEIE7YM468)
Publication of monthly factsheet
The latest monthly factsheet for UIL Limited ("UIL" or the "Company") will shortly be available through the Company's website at:
https://www.uil.limited/investor-relations/factsheet-archive
Monthly commentary
PERFORMANCE
UIL's NAV total return was down by 6.5% in February, behind the FTSE All Share total return Index which increased marginally by 0.2% over the month.
Global markets were fairly strong in February despite the more hawkish message from the US Federal Reserve that interest rates are likely to remain higher for longer as economic data from the US continued to be resilient. The US composite Purchasing Managers' Index (PMI) remained in expansionary territory and January's US nonfarm payroll data was ahead of expectations. The US market was also supported by the positive 4Q 2023 earnings reported (five of the 'Magnificent Seven' released results broadly meeting or exceeding expectations), helping to drive the S&P Index up by 5.2% over period and reaching a new all-time high in February.
The Eurostoxx Index followed suit up 4.9% over the period as data for February indicated that there was a pick-up in economic activity with the flash eurozone PMI up to 48.9 from 47.9 in January. Further inflationary pressures reduced with the eurozone CPI reducing to 2.6%. Market performance in the UK was essentially flat, despite data pointing to an improving outlook, as GDP fell in the final quarter of 2023 by 0.3% dragging the UK into technical recession.
Sterling's performance was mixed in February - down 0.7% against the US Dollar, down 0.3% against the Euro but up 0.8% against the Australian Dollar.
In emerging markets, the Chinese Shanghai Composite Index ended the month where it started the year, up by 8.1% for February. The market was boosted by more positive activity data over the Lunar New Year period as well as more supportive economic and financial measures being announced by the government such as cutting the five-year loan prime rates (benchmark for mortgage rates) by 25bps and banning short selling. The Hang Seng Index was also up by 6.6%. Elsewhere in Asia the markets were also positive with the Vietnamese Ho Chi Minh Index up by 7.6%, the Philippines market up by 4.5% whilst India saw a more modest increase, with the Sensex Index up by 1.2%.
In Latam, the outperformer for the month was Chile, with the IPSA Index up by 7.7% whist in Brazil the market remained subdued, with the Bovespa Index up by 1.0%, slowing down after its strong rally at the end of 2023. The Mexican market was down by 3.4% hampered partly by January's inflationary figures which were reported higher than expected resulting in Banxico (Mexico's central bank) keeping interest rates at 11.25%. Further, Mexico's President Andrés Manuel López Obrador recently proposed reforms created additional noise in the market.
In the commodities markets, industrial metals were mixed in February, with copper down by 1.8% but nickel seeing a rebound in pricing, up 10.3%. Precious metals were also mixed with gold up marginally by 0.2% but silver down 1.2%. Oil prices continued to creep up, increasing by 2.3% for the month.
PORTFOLIO
There were no changes to the top ten constituents of the UIL portfolio in February.
Somers' valuation decreased by 6.3%. The fall in price was mainly the result of Somers' second largest holding, Resimac, whose share price fell by 12.8% over the month as investors took some profit on the back of the recent strong rally in the sector based around rate cut expectations providing a soft landing in mid 2024. During February, one of Australia's largest mortgage lenders also warned of the increasing financial strain on consumers. UIL also holds a significant direct investment in Resimac.
Somers entered into an agreement which resulted in the merger of Waverton Investment Management Limited ("Waverton") with London & Capital Group. UIL owns 41.7% of Somers and Waverton is Somers' largest holding. Waverton is an independent investment management business with over £10bn in assets under management. The transaction will result in Somers receiving two thirds of its consideration in cash on completion together with a significant shareholding in the combined new business. The transaction is subject to various conditions, including regulatory approvals and is expected to complete in mid 2024.
Zeta's share price increased by 1.9% over the month.
UEM's share price declined by 2.4% in February, as it delivered a NAV total return of 0.6%, underperforming the MSCI Emerging Markets total return Index which was up by 5.6% in Sterling terms in the month. UEM's discount to NAV widened from 14.5% to 17.0%.
DEBT
Bank debt was reduced by £5.0m to £10.0m over the month all drawn in Sterling. Other debt increased from £7.2m to £9.9m in February.
ZDP SHARES
In February, the share price of the 2024 ZDP shares appreciated by 1.6% whilst the 2026 ZDP shares remained flat and the 2028 ZDP shares fell 1.0%.
OTHER
UIL's ordinary share price decreased by 6.1% to 115.50p in February while the discount to NAV was broadly unchanged from 39.6% to 39.3%. The second quarterly interim dividend of 2.00p per ordinary share in respect of the year ending 30 June 2024, was declared and will be paid on 4 June 2024 to shareholders on the register on 10 May 2024.
Name of contact and telephone number for enquiries:
Charles Jillings
ICM Investment Management Limited +44(0)1372 271486
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