29th Mar 2016 11:08
LONDON (Alliance News) - JPMorgan Global Emerging Markets Income Trust PLC on Tuesday said it had a "disappointing" performance in the first half of its financial year, reporting a 12.9% decrease in net assets per share in the six months ended January 31.
That compared to a decrease of 8.7% from the MSCI Emerging Markets Index, in sterling with net dividends reinvested, in the six months ended January 31.
The trust's share price has moved to a discount to net asset value. For the six months, the total return to shareholders was negative 21.3%.
With company dividends under pressure in local currency terms, according to investment managers Omar Negyal and Richard Titherington, and emerging market currencies weakening against sterling, the trust said it will consider drawing on its revenue reserve of GBP5.0 million for future dividend payments "if appropriate".
"The many and serious risks besetting emerging markets are on the front pages. The opportunities are not. In the board's view, the risks are now largely discounted in valuations. This is not to say that the worst is behind us; but, in our opinion, the outlook for future returns is good - and for two reasons," Chairman Andrew Hutton said in a statement.
"First, history suggests that, from current valuation levels, these markets have more often than not generated strong subsequent returns," Hutton said.
"Second, despite difficult operating conditions for businesses in these markets, the portfolio has some noteworthy strengths including an above average dividend yield and stronger than average balance sheets," Hutton said.
Shares in JPMorgan Global Emerging Markets Income Trust were up 0.8% at 91.75 pence on Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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