19th Jun 2014 10:49
LONDON (Alliance News) - JPMorgan Russian Securities PLC Thursday said its net asset value on a total return basis declined by 28.4% over the six months to the end of April as Russian markets fell following the outbreak of political unrest in Ukraine starting in November 2013.
In a statement, JPMorgan Russian Securities, which is managed by Oleg Biryulyov of JPMorgan Asset Management, said that it underperformed its benchmark, which declined by 26.4% over the period, but noted that the discount at which its shares trade to NAV narrowed to 10.5% as the share price total return fell by 27.6%.
"The capital returns generated by the company over the reporting period have been disappointing. It is perhaps of limited comfort, but dividends paid by Russian companies continue to be strong compared to historic levels. However, given changes made by the investment manager to the portfolio over the past six months, the manager estimates that dividend income receivable by the company in 2014 will decrease from the level seen in 2013," Chairman Lysander Tennant said in a statement, adding that so far none of the company's investments have been directly caught by the scope of Western sanctions on Russian individuals and companies.
JPMorgan Russian Securities is tasked with providing capital growth to shareholders. Nevertheless, Tennant said that the company expects to recommend the payment of a final dividend to shareholders in March 2015 despite the fall in income.
In addition, Tennant said that current valuations in Russia look attractive with relatively high dividend yields.
"We share our investment manager's belief that equity markets in Russia still provide a good long-term investment opportunity, and the current investment approach of maintaining a portfolio focused on strong cash flow generation continues to provide the best strategy for the company to prosper.
JPMorgan Russian Securities shares were Thursday quoted at 471.48 pence, up 1.5%.
By Samuel Agini; [email protected]; @samuelagini
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