14 December 2022

UIL LIMITED

(LEI Number: 213800CTZ7TEIE7YM468)

Publication of monthly factsheet

The latest monthly factsheet for UIL Limited ("UIL" or the "Company") will shortly be available through the Company's website at:

https://www.uil.limited/investor-relations/factsheet-archive

Monthly commentary

PERFORMANCE

UIL's NAV total return was up 1.9% for the month, underperforming the FTSE All Share Index which was up by 7.1% over the same period.

Global markets in November were much more positive, continuing the recovery witnessed in October. Despite the Federal Reserve and the Bank of England increasing interest rates a further 75bps to 4.0% and 3.0% respectively, investor sentiment improved on hopes that inflation pressures may have peaked and that the pace of interest rate rises may slow. The November US CPI increasing to 7.7% was lower than expected whilst US non-farm payroll data indicated that the US employment market had cooled marginally. Within Europe, inflation also eased to 10.0% from the 10.6% witnessed in October.

Global markets were further supported by signs that Chinese policymakers are slowly prepared to relax some of their zero-Covid policies on the back of rising social unrest as well as offer some support to the property markets via a 16-point rescue plan. Furthermore, the first in person meeting between President Xi and President Biden at the G20 summit in Indonesia in which they agreed to resume cooperation in key areas, also helped fuel the optimism in the markets. The Hang Seng was up 26.6% for the month.

With the expectation of softer US inflation, a weaker Dollar and lower US interest rates, the majority of markets in November saw strong returns. The S&P 500 was up 5.4% for the period whilst the FTSE 100 was up 6.7% and the Eurostoxx Index up 9.6%. One outlier for the period was the Brazilian Bovespa Index which was down 3.1%. November was the first month after the Brazilian general elections and President-elect Lula asked Congress for a waiver to increase and extend social benefits promised during his campaign, creating volatility in the local market about the sustainability of the country's fiscal accounts. Subsequently this has put into question Brazilian inflationary outlook and the monetary easing expected to start in 2023.

Sterling continued to recover some of its losses against the US Dollar, up 3.4% and also appreciated against the Hong Kong Dollar, up 2.9%, although depreciation against the Euro was down 0.7% and against the Australian Dollar Sterling was down 1.2% in November.

Commodities were mixed with Brent Crude oil falling 9.9% for the month, primarily due to concerns about weaker demand globally whilst gold rallied 8.3% to USD 1,768.52/oz, its highest price since July 2022 following the positive comments by the Federal Bank supporting slow rate increases which helps non-yielding assets. The weaker US Dollar also helped make metals cheaper, resulting in copper being up 10.5% over the month.

PORTFOLIO

There were no changes to the top ten constituents of UIL's portfolio in November. Performance within the portfolio was overall positive.

Panoramic, the Australian listed nickel-copper-cobalt producer saw its share price up 21.4% in November, clawing back some of the losses witnessed in recent months, as the commodity sector has been helped by prospects of a weaker Dollar. Also, at the end of October, Panoramic announced its 1Q23 production results which were positive with production in line with market expectations and FY23 guidance maintained. Resimac was also up 10.1% helped by the expectation that interest rate rises will slow. Resolute Mining was down 20.5% for the period, impacted by the announcement of an institutional placement of up to AUD 200m (AUD 140m underwritten and AUD 60m non-underwritten) with the proceeds of the AUD 140m to be used to deleverage the balance sheet. The placement was completed at the beginning of December at a 23.8% discount. 

DEBT

During November, bank borrowings in Sterling continued to be maintained at £50.0m. The Australian Dollar and Canadian Dollar hedges were also fully closed out in the month.

ZDP SHARES

After the redemption of the 2022 ZDP shares in October, three classes of ZDP shares remain, expiring on 31 October in 2024, 2026 and 2028.

The share prices of the 2024, 2026 and 2028 ZDP shares all increased. The 2024 ZDP shares increased to 124.00p, up 5.5%, the 2026 ZDP shares were up 6.1% to 113.50p and the 2028 ZDP shares were up 10.5% to 95.00p. The yields to redemption on the ZDP shares at the end of November were 5.9% for the 2024 ZDP shares, 7.6% for the 2026 ZDP shares and 8.3% for the 2028 ZDP shares.

OTHER

UIL's ordinary share price increased by 2.8% to 168.00p in November whilst the discount to NAV marginally reduced to 28.7% from 29.3%.

On 18 November 2022, UIL declared a first quarterly interim dividend of 2.00p per ordinary share in respect of the year ending 30 June 2023, which will be paid on 22 December 2022 to shareholders on the register on 2 December 2022.

Name of contact and telephone number for enquiries:

Charles Jillings

ICM Investment Management Limited                                 +44(0)1372 271486