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