TIDMAFMF
RNS Number : 2854G
Advance Frontier Markets Fund Ltd
02 March 2015
ADVANCE FRONTIER MARKETS FUND LIMITED
HALF-YEARLY FINANCIAL REPORT
For the six months ended 31 December 2014
Investment objective
The objective of the Company is to generate long-term capital
growth for its shareholders. The Investment Manager invests
predominantly in a diversified portfolio of funds and other
investment products which derive their value from Frontier Markets.
The proportion of the portfolio invested in each component of
Frontier Markets varies according to where the Investment Manager
perceives the most attractive investment opportunities to be.
Investee funds may include closed and open-ended funds, exchange
traded funds, structured products, limited partnerships and managed
accounts.
Performance
For the six months ended 31 December 2014
Net Asset Value ("NAV") per share (in US dollars) -9.1%
Share price (in US dollars) -13.6%
As at 31 December 2014
NAV per share (in US dollars) $0.9829
Share price (in US dollars) $0.8724
Share price (in GB pounds) GBP0.5600
Net Assets $166.6m
CHAIRMAN'S STATEMENT
On behalf of your Board, I present to you the Half-yearly
Financial Report for Advance Frontier Markets Fund Limited ("AFMF",
"the Company", "the Fund") for the half year ended 31 December
2014.
Frontier markets faced a challenging environment in the second
half of 2014 as the tailwinds of high oil prices, loose global
monetary conditions, and stable exchange rates reversed in the
final quarter. The Fund's NAV declined by -9.1%, in US dollar
terms, over the reporting period, reversing positive gains seen in
the first half of 2014. The sharp decline in commodity prices,
lower global growth expectations, and a series of geopolitical
events across our markets all contributed to declining sentiment.
The result was a broad frontier markets decline, with the MSCI
Frontier Markets Index falling by 11.1% over the reporting
period.
Continuation vote
On 3 December 2014, Advance Frontier Markets Fund held its 7th
annual shareholder meeting, at which a resolution to approve the
continuation of the Company in its current form was passed with
98.1% of votes cast in favour.
I would remind shareholders that they will be afforded an
opportunity to fully realise their investment in the Company,
should they so desire, at the then prevailing net asset value less
costs by way of proposals to be put to shareholders at the time of
the Company's annual general meeting in 2016.
Alternative Investment Fund Managers ("AIFM") Directive
Advance Emerging Capital Limited ("AECL"), the Company's
investment manager ("the Manager"), received its authorisation as
an Alternative Investment Fund Manager from the UK's Financial
Conduct Authority ("FCA") in July 2014. In line with the
requirements of the directive, Northern Trust (Guernsey) Limited
was appointed to provide depositary services to the Company with
effect from 26 September 2014.
Developments at Investment Manager
In September 2014 the investment team at AECL completed the
acquisition of a significant minority stake in the management
company. I am pleased to note that all members of the investment
team participated. I believe this development will deliver ongoing
team stability and provides a close alignment of interests between
the investment manager and the Company. On 31 December 2014 Dr.
Slim Feriani left AECL after being closely involved with the
Company since its inception. The Board is conscious of his
significant contribution to the Company and is sincerely grateful
for his hard work over the years.
Future prospects
I remain positive on the long term structural case for frontier
markets despite recent weakness. Healthy demographic profiles,
increasing personal consumption levels, maturing political and
social institutions and strong economic growth projections should
provide the business environment for well managed companies to
continue to grow earnings in a sustainable manner. This should
result in share price appreciation and, ultimately, sustained
capital growth for long term investors in the asset class and
shareholders in the Company.
Finally, I would like to thank the Company's shareholders for
their continued support, my colleagues on the Board for their
diligence and professionalism, the Investment Manager for its
continued efforts and all of our advisers for their advice and
assistance.
Grant Wilson
2 March 2015
INVESTMENT MANAGER'S REPORT
Performance review
During the half year to 31 December 2014 the Company's net asset
value per share (NAV) and share price fell by 9.1% and 13.6% in US
dollar terms respectively. The discount to net asset value at which
the Company's shares trade commenced the period at 6.6% but widened
sharply in the final weeks of December to 11.2% as sentiment
towards the asset class turned negative.
Although AFMF has not adopted MSCI Frontier Markets as a
benchmark, its performance was ahead of the index in the six month
reporting period helped by positive contributions from asset
allocation in Africa, the Middle East and cash raised from the sale
of Middle Eastern investments in the final quarter.
Manager selection made a small positive contribution during the
half-year. Funds including Africa Emerging Markets Fund, Ashmore
Middle East Equity Fund, EFG-Hermes Saudi Arabia Equity Fund,
Fondul Proprietatea, Steyn Capital Africa Fund and Vietnam Holding
Limited all performed strongly. However, not all holdings fared as
well, with the portfolio's investments in Sustainable Capital
Nigeria Fund, PineBridge East Africa Fund as well as those across
the African natural resources sphere all failing to add value
against their benchmarks.
Turning to discounts and corporate activity, the majority of
value added came from AFMF's holdings in Vietnam. In mid-December,
shareholders in PXP Vietnam Fund voted to approve a merger with an
open ended fund managed by the same investment team. PXP Vietnam
ended the year trading on a discount of 5.6%, substantially
narrower than the level of 13.9% that prevailed prior to the first
merger announcement in September 2014. The merger completed on 2
February 2015 based on the NAVs of the respective funds as at 31
December 2014. Vietnam Holding Limited, another of AFMF's holdings
in the same market, saw its discount narrow from 23.9% to 17.7% on
the back of strong performance and positive investor sentiment for
that market. Elsewhere, the discount on Fondul Proprietatea (a
Romanian holding) narrowed from 31.9% to 26.1% over the six months
and AFMF also benefitted from a tender offer that completed in
early December for just over 6% of shares outstanding, priced at a
6.4% discount to NAV. AFMF's sole Africa-focused closed end fund
investment, Africa Opportunity Fund, suffered from discount
widening, ending the period at a 15.1% discount having started it
trading on a premium of 2.9%.
Figure 1: Advance Frontier Markets Fund Performance Report
6 Months 12 Months 3 Years 5 Years Since Inception
AFMF NAV -9.1% -1.5% 35.8% 38.2% 1.5%
--------- ---------- -------- -------- ----------------
AFMF Price -13.6% -3.5% 42.0% 42.1% -12.8%
--------- ---------- -------- -------- ----------------
Source: Advance Emerging Capital Limited, Bloomberg, all figures
in US dollar terms to 31 December 2014.
Inception was 15 June 2007 (initial NAV per share after share
issue expenses was USD 0.9685).
Market environment(1)
For the half-year as a whole, the MSCI Frontier Markets index
lost 11.1% as the final months of 2014 witnessed a sharp sell-off
that saw the asset class underperform both emerging and developed
markets. The steep decline in oil prices in the second half of 2014
was largely responsible for waning investor sentiment towards
frontier markets in general as a large percentage of the frontier
markets index is composed of energy producers, including the two
largest constituents, Kuwait and Nigeria.
Geopolitical events also contributed to declining sentiment,
particularly in Eastern Europe where little progress was made
towards a peaceful resolution of the situation in Ukraine.
Elsewhere the rise of Islamic State in the Middle East and the
continued insurgency by Boko Haram in Nigeria weighed on
sentiment.
Figure 2: Performance of MSCI Frontier Markets Index compared
with Emerging and Developed Markets over the six months to 31
December 2014
SEE HALF YEARLY REPORT
Source: Bloomberg, MSCI, net total return in US dollar terms,
six months to 31 December 2014
Figure 3: Market returns over the six months to 31 December 2014
in US dollar terms
SEE HALF YEARLY REPORT
Source: Bloomberg, MSCI, S&P and local market indices, total
return indices where available in US dollar terms, six months to 31
December 2014
1. All returns in this section are in US dollar terms in respect
of the six months ended 31 December 2014 unless otherwise
stated.
Portfolio
The Fund's asset allocation at the end of the period is shown on
page 5.
The final months of the period saw a change in emphasis within
AFMF's portfolio as we significantly reduced long-standing
positions in EFG-Hermes Saudi Arabia Equity Fund, Ashmore Middle
East Equity Fund and Qatar Investment Fund on the view that better
opportunities in the frontier world were to be found outside the
Gulf Cooperation Council region given the reliance of those
economies on petrodollars to fund economic growth and maintain
social stability.
The two largest recipients of the proceeds of those sales were
Steyn Capital Africa Fund and a structured product in Pakistan
which provides broad exposure to some of the larger and more liquid
stocks in that market. Steyn Capital's investment process targets
undervalued companies which are identified through the careful
analysis of company financials. The approach tends to see the
portfolio skewed towards less well-known companies across the
African continent which are often overlooked by sell-side analysts
and other institutional investors. The fund has enjoyed strong
returns in the past whilst also demonstrating defensive qualities
in more challenging markets. The addition to AFMF's Pakistan
exposure was made on the grounds that the local stock market
contains numerous attractively valued companies that have
demonstrated the ability to thrive in a challenging macroeconomic,
security and political environment. The country also has the
support of the IMF and it is a clear beneficiary from lower oil
prices.
Market outlook
Equity valuations in frontier markets remain undemanding when
compared with both emerging and developed markets, whilst growth
has proven reasonably resilient and debt levels remain low. On a
trailing basis the MSCI Frontier Markets Index trades on a Price to
Earnings multiple of 10.5x and a Price to Book multiple of 1.6x
while delivering a dividend yield of 4.2%.
In Africa, the Fund retains material exposure to Nigeria despite
the macro headwinds posed by lower energy prices on the basis that
the long term opportunity presented by its demographics, combined
with low valuation levels, will outweigh any further currency or
economic weakness in the near term. Elections, currently scheduled
for March, may prove a catalyst for some of this value being
unlocked. The rest of the continent presents a myriad of
opportunities, especially for managers willing to conduct in-depth
fundamental analysis on mid and small-cap companies, which are
under-researched and often undervalued. This is a strategy the
Manager finds compelling for the long term and, therefore, the Fund
remains invested with a number of best of breed managers who
espouse this philosophy. The Fund will continue to hold selective
exposure to the mining and energy sectors in Africa, despite their
recent poor performance, in the belief that the extreme pessimism
surrounding them has led to exceptional opportunities for those
with the knowledge and focus to select those with sound long term
fundamentals. The extent of the fall from grace of these sectors
and the divergence with other "new economy" sectors was brought to
our attention recently in a report by Bank of America Merrill Lynch
that showed Apple Inc's market capitalisation is now a third
greater than the combined total of every listed mining company
globally. The sector remains of particular relevance in an African
context given the continent's natural resource endowment, even if
it is not represented in frontier indices.
The larger Middle Eastern markets were, prior to the start of
the period, seen by investors as relative safe havens on account of
their currencies being pegged to the US dollar, strong sovereign
balance sheets and stable politics. The region faces a potentially
challenging environment if lower energy prices persist. This
uncertainty prompted us to reduce our exposure to the region, at
least in the short term. The Manager expects to retain minimal
exposure to Kuwait, where valuations fail to compensate investors
for the complex web of cross holdings between companies and the
unexciting macroeconomic outlook.
Argentina is amongst those markets likely to be driven by
political change in 2015, as elections in October will almost
certainly see President Cristina Fernandez de Kirchner replaced by
another candidate from within the Peronist party. A transition to a
less confrontational, rational leader could see significant
improvement if the economic mismanagement of the last decade can be
unwound.
In Asia, we continue to favour Vietnam where we find an economy
that is on a solid footing with low inflation, a stable currency
and reasonable growth. However, its stock market has languished and
our locally based managers are able to find numerous attractively
valued stocks. As mentioned in the "Portfolio" section we also like
Pakistan, where companies continue to deliver healthy levels of
growth despite the negative headlines.
Whilst the global outlook remains uncertain and geopolitical
matters continue to present concerns in a number of regions, the
recent sell off has presented attractive entry points at which to
add to core exposures in our favoured markets. We remain convinced
of the benefits of our strategy of investing with skilful managers
in those markets where we can identify the most compelling
combinations of quality, value, growth and positive change.
Advance Emerging Capital Limited
2 March 2015
TWENTY LARGEST INVESTMENTS
Name Asset Class Investment Style* Structure At 31 At 31
Manager December December
2014 Valuation 2014 %
GBP'000 of net
assets
GBP'000
VinaCapital
Vietnam VinaCapital
Opportunity Vietnamese Investment Cayman closed
Fund multi-asset Management Multi-asset end fund 11,975 7.2%
------------- ------------- ----------------- -------------------- ------------------- ----------
Sustainable
Capital
Nigeria Nigerian Sustainable Quality Mauritius
Fund equities Capital and value OEIC 10,770 6.5%
------------- ------------- ----------------- -------------------- ------------------- ----------
Sustainable
Capital
Africa
Consumer African Sustainable Quality Mauritius
Fund equities Capital and value OEIC 10,385 6.2%
------------- ------------- ----------------- -------------------- ------------------- ----------
East African
PineBridge equities
Sub-Saharan & fixed PineBridge
Fund income Investments Value Cayman OEIC 9,447 5.7%
------------- ------------- ----------------- -------------------- ------------------- ----------
Africa
Emerging African
Markets Fund equities Ashmore Value Dublin OEIC 9,134 5.5%
------------- ------------- ----------------- -------------------- ------------------- ----------
Templeton Romanian
BofAML Fondul Romanian Asset closed end
Proprietatea equities Management Value fund 8,994 5.4%
------------- ------------- ----------------- -------------------- ------------------- ----------
Ashmore
Middle
East Equity Middle East Quality Luxembourg
Fund equities Ashmore and value SICAV 8,744 5.2%
------------- ------------- ----------------- -------------------- ------------------- ----------
Africa African Africa
Opportunity equities Opportunity Cayman closed
Fund & debt Partners Value/arbitrage end fund 8,435 5.1%
------------- ------------- ----------------- -------------------- ------------------- ----------
Copernico
Advance Capital
Copernico Partners
Argentina Argentine (Bermuda)
Equity Fund equities Ltd Value Cayman OEIC 7,944 4.8%
------------- ------------- ----------------- -------------------- ------------------- ----------
PXP Vietnam
PXP Vietnam Vietnamese Asset Undervalued Cayman closed
Fund equities Management growth end fund 7,306 4.4%
------------- ------------- ----------------- -------------------- ------------------- ----------
SCM Africa African Steyn
Fund equities Capital Deep value Maltese SICAV 6,891 4.1%
------------- ------------- ----------------- -------------------- ------------------- ----------
Sturgeon
Central Asia Central
Equities Asian Sturgeon Luxembourg
Fund equities Capital Value SICAV 6,664 4.0%
------------- ------------- ----------------- -------------------- ------------------- ----------
iShares MSCI BlackRock
Frontier Frontier Investment
100 ETF equities Management Passive ETF 6,346 3.8%
------------- ------------- ----------------- -------------------- ------------------- ----------
Qatar Epicure Isle of Man
Investment Qatari Managers Growth closed end
Fund PLC equities Qatar and value fund 5,869 3.5%
------------- ------------- ----------------- -------------------- ------------------- ----------
EFG Hermes
- Saudi Saudi
Arabia Arabian EFG-Hermes Growth Saudi open
Equity Fund equities KSA and value ended fund 5,267 3.2%
------------- ------------- ----------------- -------------------- ------------------- ----------
Middle East
and North
MENA Alchemy African
Fund equities Mena Capital Value Bermuda OEIC 4,718 2.8%
------------- ------------- ----------------- -------------------- ------------------- ----------
Pakistan
Picic Growth Pakistani PICIC Asset closed end
Fund equities Management Value fund 4,106 2.5%
------------- ------------- ----------------- -------------------- ------------------- ----------
DB MSCI Bangladeshi DB Platinum Luxembourg
Bangladesh equities Advisors Index tracker SICAV 3,649 2.2%
------------- ------------- ----------------- -------------------- ------------------- ----------
Pakistani
MSCI Pakistan equities N/A Passive Participatory-note 3,335 2.0%
------------- ------------- ----------------- -------------------- ------------------- ----------
Avaron Eastern
Emerging European Avaron Asset Estonian
Europe Fund equities Management Value OEIC 2,876 1.7%
-------------- ------------- ------------- ----------------- -------------------- ------------------- ----------
Top twenty
holdings 142,855 85.8%
------------------------------------------------------------------------------------- ------------------- ----------
Other holdings 15,700 9.4%
------------------------------------------------------------------------------------- ------------------- ----------
Total holdings 158,555 95.2%
------------------------------------------------------------------------------------- ------------------- ----------
Cash and
other net
assets 8,001 4.8%
------------------------------------------------------------------------------------- ------------------- ----------
Net assets 166,556 100.0%
------------------------------------------------------------------------------------- ------------------- ----------
OEIC = open ended investment company
*As determined by Advance Emerging Capital Limited
ASSET ALLOCATION
(on a portfolio look through basis)
COUNTRY SPLIT PERCENTAGE OF
NET ASSETS
AFRICA 38.5%
Botswana 1.4%
Dem. Rep. of Congo 0.1%
Egypt 4.5%
Ghana 1.6%
Ivory Coast 0.7%
Kenya 6.0%
Mauritius 0.8%
Morocco 1.3%
Namibia 0.3%
Nigeria 10.8%
Senegal 1.4%
South Africa 0.2%
Tanzania 0.7%
Tunisia 1.5%
Zambia 3.0%
Zimbabwe 2.1%
Other Africa 2.1%
ASIA 24.4%
Bangladesh 2.3%
Kazakhstan 2.5%
Pakistan 5.8%
Vietnam 12.6%
Other Asia 1.2%
EASTERN EUROPE 7.0%
Bulgaria 0.0%
Croatia 0.0%
Estonia 0.0%
Romania 5.4%
Serbia 0.0%
Other Eastern Europe 1.6%
MIDDLE EAST 14.1%
Bahrain 0.4%
Kuwait 1.5%
Oman 0.4%
Qatar 4.0%
Saudi Arabia 4.9%
UAE 2.3%
Other Middle East 0.6%
LATIN AMERICA 5.4%
Argentina 5.0%
Other Latin America 0.4%
CASH (including
cash in underlying
funds) 11.7%
OTHER NET LIABILITIES (1.1%)
TOTAL 100.0%
(UNAUDITED) STATEMENT OF COMPREHENSIVE INCOME
6 months to 6 months to 31 6 months to 31 6 months to 31 6 months to 31 6 months to 31
31 December December 2014 December 2014 December 2013 December 2013 December 2013
2014
Revenue Capital Total Revenue Capital Total
$'000 $'000 $'000 $'000 $'000 $'000
(Losses) /
gains on
investments - (17,300) (17,300) - 18,951 18,951
Capital losses
on currency
movements - (36) (36) - (4) (4)
-------------- --------------- --------------- --------------- --------------- ---------------
Net investment
(losses) /
gains - (17,336) (17,336) - 18,947 18,947
-------------- --------------- --------------- --------------- --------------- ---------------
Investment
income 2,495 - 2,495 1,859 - 1,859
-------------- --------------- --------------- --------------- --------------- ---------------
Total income /
(loss) 2,495 (17,336) (14,841) 1,859 18,947 20,806
-------------- --------------- --------------- --------------- --------------- ---------------
Investment
management
fees (357) (714) (1,071) (304) (608) (912)
Other expenses (353) - (353) (343) - (343)
-------------- --------------- --------------- --------------- --------------- ---------------
Net profit /
(loss) from
operations
before finance
costs and
taxation 1,785 (18,050) (16,265) 1,212 18,339 19,551
-------------- --------------- --------------- --------------- --------------- ---------------
Finance costs (139) (113) (252) - - -
-------------- --------------- --------------- --------------- --------------- ---------------
Net profit /
(loss)
before
taxation 1,646 (18,163) (16,517) 1,212 18,339 19,551
-------------- --------------- --------------- --------------- --------------- ---------------
Taxation (131) - (131) (186) - (186)
-------------- --------------- --------------- --------------- --------------- ---------------
Net profit /
(loss) after
taxation 1,515 (18,163) (16,648) 1,026 18,339 19,365
-------------- --------------- --------------- --------------- --------------- ---------------
Earnings per
ordinary
share 0.89c (10.72c) (9,82c) 0.61c 10.82c 11.43c
The total column of this statement represents the Company's
Statement of Comprehensive Income, prepared under IFRS. The revenue
and capital columns, including the revenue and capital earnings per
share data, are supplementary information prepared under guidance
published by the Association of Investment Companies. The Company
does not have any income or expenses that are not included in the
profit for the period and therefore the "Profit on ordinary
activities after taxation" is also the total comprehensive income
for the period.
All capital and revenue items in the above statement derive from
continuing operations. No operations were acquired or discontinued
during the period.
(UNAUDITED) STATEMENT OF FINANCIAL POSITION
At 31 At 31 At 30 June
December December 2014
2014 2013 $'000
$'000 $'000
Non-current assets
Investments designated as fair value
through profit or loss 158,555 168,435 187,270
Current assets
Financial commitments paid 5,500 - 1,250
Other receivables 337 451 643
Sales for future settlement - 159 -
Cash and cash equivalents 12,203 315 2,854
------------ ------------ --------------
18,040 925 4,747
Total assets 176,595 169,360 192,017
------------ ------------ --------------
Current liabilities
Loans payable 4,500 - 6,500
Purchases for future settlement 5,300 - -
Other payables 239 256 2,313
------------ ------------ --------------
10,039 256 8,813
Total assets less current liabilities 166,556 169,104 183,204
------------ ------------ --------------
Share premium account 88,788 88,788 88,788
Share purchase reserve 82,319 82,319 82,319
Capital reserve (6,549) (2,881) 11,614
Revenue reserve 1,998 878 483
------------ ------------ --------------
Total equity 166,556 169,104 183,204
------------ ------------ --------------
Net asset value per ordinary share
(US cents) 98.29c 99.79c 108.11c
Number of ordinary shares in issue 169,460,000 169,460,000 169,460,000
(UNAUDITED) STATEMENT OF CHANGES IN EQUITY
Share Share
6 months to 31 December premium purchase Capital Revenue
2014 account reserve reserve reserve Total
$'000 $'000 $'000 $'000 $'000
Opening shareholders' funds 88,788 82,319 11,614 483 183,204
(Loss)/profit for the period - - (18,163) 1,515 (16,648)
-------- --------- --------- --------- ---------
Closing equity 88,788 82,319 (6,549) 1,998 166,556
-------- --------- --------- --------- ---------
Share Share
6 months to 31 December premium purchase Capital Revenue
2013 account reserve reserve reserve Total
$'000 $'000 $'000 $'000 $'000
Opening shareholders' funds 88,788 82,319 (21,220) (148) 149,739
Profit for the period - - 18,339 1,026 19,365
-------- --------- --------- --------- -------
Closing equity 88,788 82,319 (2,881) 878 169,104
-------- --------- --------- --------- -------
(UNAUDITED) STATEMENT OF CASH FLOWS
6 months 6 months
to 31 to 31 December
December 2013
2014
$'000 $'000
Operating activities
Cash inflow from investment income and
bank interest 2,244 1,758
Cash outflow from management expenses (3,510) (1,324)
Cash inflow from disposal of investments 36,283 22,429
Cash outflow from purchase of investments (23,340) (25,648)
Cash outflow on foreign exchange costs (36) (4)
Cash outflow from taxation (132) (188)
---------- ----------------
Net cash flow from / (used in) operating
activities 11,509 (2,977)
---------- ----------------
Financing activities
Decrease in bank borrowings (2,000) -
Finance charges and interest paid (160) -
---------- ----------------
Net cash flow used in financing activities (2,160) -
---------- ----------------
Net increase / (decrease) in cash and
cash equivalents 9,349 (2,977)
---------- ----------------
Cash and cash equivalents opening balance 2,854 3,292
Cash inflow / (outflow) 9,349 (2,977)
---------- ----------------
Cash and cash equivalents closing balance 12,203 315
---------- ----------------
NOTES
1. Company information
The Company is a closed-ended investment company incorporated
and resident in Guernsey. Its ordinary shares are listed on the
Channel Islands Securities Exchange and quoted on AIM.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting. They are
unaudited and do not include all of the information required for
full annual financial statements. These interim financial
statements should be read in conjunction with the financial
statements of the Company as at and for the year ended 30 June
2014. The financial statements of the Company as at and for the
year ended 30 June 2014 were prepared in accordance with
International Financial Reporting Standards ("IFRS") and received
an unqualified audit report. The accounting policies used by the
Company are the same as those applied by the Company in its
financial statements as at and for the year ended 30 June 2014.
Under IFRS, the Statement of Recommended Practice (SORP) issued
by the Association of Investment Companies has no formal status,
but the Company has taken the guidance of the SORP into account to
the extent that it is deemed appropriate and compatible with IFRS
and the Company's circumstances.
The total column of the income statement is the profit and loss
account of the Company. The capital and revenue columns provide
supplementary information.
Investments have been classified as "fair value through profit
and loss".
After initial recognition such investments are valued at fair
value which is determined by reference to
(i) market bid price for investments quoted on recognised stock
exchanges;
(ii) net asset value per individual investee funds'
administrators for unquoted open ended funds; and
(iii) by using other valuation techniques to establish fair
value for any other unquoted investments.
The Company's shares were issued in US dollars and the majority
of the Company's investments are priced in US dollars and this is
considered to be the functional currency of the Company. Therefore,
it is the Company's policy to present the accounts in US dollars.
The Company's shares are traded in Sterling on AIM and on the
Channel Islands Securities Exchange.
3. Earnings per share
Earnings per share is based on the loss of $16,648,000 (2013:
$19,365,000 gain) attributable to the weighted average of
169,460,000 ordinary shares in issue in the six months to 31
December 2014 (2013: 169,460,000).
4. Taxation
The charge for taxation relates to tax suffered on dividends
received from overseas investments.
5. Net asset value per share
Undiluted net asset value per ordinary share is based on net
assets of $166,556,000 (2013; $169,104,000) divided by 169,460,000
(2013: 169,460,000) ordinary shares in issue at the period end.
6. Dividend
The directors do not recommend an interim dividend. As the
Company's investment objective is based on capital appreciation and
it expects to re-invest realised returns from investments that are
consistent with its investment strategy, the directors do not
presently intend to make dividend distributions to
shareholders.
7. Investment management fees
Fees payable to the Investment Manager are shown in the Income
Statement. No performance fee accrual has been made in the period
to 31 December 2014 (2013: nil). The final performance fee payable
in respect of the year ended 30 June 2014 was $1,870,607.
At 31 December 2014, Manager's fees of $157,896 (2013: $159,103)
were accrued in the Statement of Financial Position.
8. Status of this report
These financial statements are not the Company's statutory
accounts. They are unaudited. This report will be sent to
shareholders and copies will be made available to the public at the
registered office of the Company. It is also available on the
Company's website, www.frontiermarketsfund.com.
The Half-yearly financial report was approved by the Board of
directors on 2 March 2015.
REGISTERED OFFICE
11 New Street
St Peter Port
Guernsey
GY1 2PF
Enquiries:
Advance Emerging Capital Limited (investment manager to Advance
Frontier Markets Fund Limited)
Andrew Lister / Bernard Moody Tel: +44 (0)20 7016 0030
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett Tel: +44 (0)20 7383 5100
Numis Securities Limited (Nominated Broker)
David Benda Tel: +44 (0) 20 7260 1275
END
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The company news service from the London Stock Exchange
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