27th Jan 2015 18:28
LONDON (Alliance News) - JPMorgan Russian Securities PLC Tuesday said its return to shareholders and net asset value per share both underperformed against its benchmark during the last financial year due to "exceptional turbulence" in the Russian economy, resulting in the company slashing its dividend for the year.
The company's return to shareholders fell 28.8% during the year ended October 31, whilst the company's net asset value per share fell by 26.7% to 450.0 pence, from 631.1 pence a year earlier. Both underperformed compared to the benchmark, the MSCI Russian 10/40 Equity Indices Index, which fell 21% over the year ended October 31.
"In the reporting period the company's performance was 5.7% below benchmark, with stock selection being the main factor," said the company.
The company said revenue for the year totalled GBP7.0 million, down from the GBP9.7 million a year earlier, resulting in the revenue per share falling to 13.38 pence per share from 18.14 pence per share in 2013.
Based on the revenue, the company has proposed a dividend of 13.00 pence per share to be paid for the year, which has also taken a hit from the 15.30 pence per share dividend announced last year.
"The market may have priced in much of the bad news, but with the current degree of uncertainty in the political arena, and the likelihood of negative fallout in the economy, Russian equities may see further downside," said the company.
"Our investment manager believes that the Russian economy will not collapse in 2015 under the significant pressures of Western economic sanctions, Rouble devaluation and the falling oil price. The Russian market remains cheap relative to other emerging markets, and dividend yields remain attractive relative to historical levels and to bond markets," it added.
In a separate statement, the company said its investment management fee has been reduced by 1% per year on the company;s net assets as from November 1, 2014.
JPMorgan Russian Securities shares closed down 3.9% to 296.00 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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