Interim Management Statement (4885R)
November 04 2011 - 3:00AM
UK Regulatory
TIDMIAEM TIDMIAES
RNS Number : 4885R
Impax Asian Environmental Mkts Plc
04 November 2011
Impax Asian Environmental Markets Plc (the "Company")
Interim Management Statement
For the three months ended 30 September 2011
This interim management statement covers the period from the 1
July 2011 to 30 September 2011 (the "Period"), and is prepared in
accordance with the UK Listing Authority's Disclosure and
Transparency Rule 4.3.
Investment Objective
The Company's investment objective is to generate long-term
capital growth through investment in a diverse portfolio of
companies in the markets for cleaner or more efficient delivery of
basic services of energy, water and waste in the Asia-Pacific
Region. To be eligible for investment, such companies must have at
least 20% of their turnover, profits or invested capital in these
markets.
Performance
During the Period, the Company's undiluted NAV per Ordinary
Share (excluding current year net revenue) declined by 26.8% from
118.5p to 86.8p whilst the MSCI AC Asia Pacific ex-Japan Index and
the FTSE Environmental Opportunities Asia Pacific ex-Japan Index
fell by 19.1% and 29.0% respectively (price returns in pounds
sterling).
Global equity markets experienced a major correction throughout
the third quarter of 2011 as a result of renewed concerns about
European Sovereign debt and a downgrade to the US debt rating.
Environmental markets underperformed as concerns about European
government budget cuts weighed on the renewable energy sector, and
fears of a double-dip recession negatively impacted industrial and
technology related energy efficiency stocks. Emerging Markets
underperformed global equities as concerns about inflation and
rising interest rates persisted, risk appetite declined, and
Chinese companies with smaller capitalisations were de-rated. In
contrast, the Japanese market outperformed as the economy weathered
the disruptions of the earthquake better than was expected.
Gearing
On 28 April 2011, the Company entered into a two year US$50
million revolving credit facility; a decision that was supported by
the fact that the valuation of the companies in the portfolio had
fallen to a level that was attractive compared with both historic
levels and expected growth rates. US$25 million was drawn down in
May which remained outstanding at 30 September 2011.
Portfolio Activity
During the Period, the Company added two new holdings to its
portfolio and sold out of four positions. Share price weakness
resulting from macro-economic concerns was used to increase the
weightings in a number of stocks where the fundamentals remained
strong. The five largest holdings as at 30 September 2011 are set
out below and illustrate the Manager's continued preference for a
diversified portfolio.
Company Activity Country where Portfolio weighting
listed
Environmental and engine
Horiba testing Japan 4.1%
China Longyuan Renewable IPP Hong Kong 4.1%
ENN Energy Natural gas distribution Hong Kong 4.0%
Yingde Gases Industrial gases Hong Kong 3.9%
Daiseki Hazardous waste management Japan 3.8%
Outlook
The Manager's global macroeconomic outlook remains cautious.
However, there are signs that Asian inflation is peaking and that a
hard landing in China is less likely. Against such an uncertain
economic background market volatility is likely to be a continuing
feature in the foreseeable future.
Environmental policy momentum remains encouragingly strong, in
particular in China where the latest Five Year Plan includes the
creation of a number of environmental sectors as strategic
industries and commits to substantial investment, notably US$450
billion in waste and water infrastructure. In addition, post
Fukishima, Japan has increased emphasis on renewables and energy
efficiency policy.
In the view of the Manager and the Board, recent share price
weakness provides a good entry point for investors willing to take
a long-term view on a sector with such compelling fundamentals.
The interim management statement will be made available on the
Manager's website www.impax.co.uk
3 November 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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