TERRA CAPITAL PLC Terra Capital Plc
Fund Manager's Update Regarding Q4 2015
Terra Capital Plc ('TCA' or the 'Fund'), the AIM quoted investment company focused on investing in value opportunities globally, primarily in frontier markets is pleased to report that it has received the latest report from Terra Partners Asset Management Limited ('TPAM' or the 'Fund Manager'), covering its activities in Q4 2015.
The Fund Manager's update covering Q4 2015 is reproduced below.
Terra Partners Asset Management Limited
Portomaso Tower, 8/5A
Portomaso Avenue
St Julian's STJ 4011 Malta
Telephone +356 2371 7000
Regulated by the Malta Financial Services Authority, Reg. No. C 56353
Registered Investment Adviser with the US Securities & Exchange Commission
February 12, 2016
Terra Partners Asset Management Limited ('TPAM' or the 'Fund Manager') presents its Fourth Quarter 2015 Update to shareholders regarding the activities of Terra Capital Plc. ('TCA' or the 'Fund'), an AIM quoted investment trust investing globally in value opportunities, primarily in frontier markets.
The opinions expressed in this document represent the views of TPAM, the Fund Manager of TCA, at the time of its preparation. This document has been prepared from publicly available information, internally developed data and other sources believed to be reliable, and all reasonable precautions have been taken to ensure its accuracy; however, no representation or warranty about the accuracy of the information contained in, or of any omissions from, this document or any supplementary information made available to any interested party or its advisers is implied, and any liability in respect of such information or omissions is hereby expressly disclaimed. Note that the information herein is not all of the information TPAM had available, or which it relied upon, when making its initial and continuing investment decisions. TPAM reserves the right to amend the information provided herein, and its opinions, at any time, and undertakes no obligation (express or implied) to provide any recipient with any further information or to correct any inaccuracies or omissions which may subsequently become apparent. Readers are advised that a fund managed by TPAM, some officers and employees of TPAM, and a Director of TCA currently own positions in TCA.
Investments in Emerging and Frontier markets usually suffer from liquidity problems, and are often affected by governmental interference in the free market, local politics and vagaries in commodity and currency prices; therefore, their prices can be very volatile. This means that it can be difficult to acquire and subsequently sell the shares noted in TCA's portfolio. This document is for information purposes only and it is not intended as an offer or solicitation regarding the purchase or sale of any security or investment vehicle.
All solicitations or offers regarding TCA are made and transacted on the public market of the AIM Section of the London Stock Exchange and occur by reference to TCA's Offering Memorandum and the document titled 'Tender Offer to Purchase Ordinary Shares at the Tender Price and Restructuring and Amendment to the Directors' Incentive Plan and Change of name to Terra Capital PLC and Notice of Extraordinary General Meeting' of the April 30, 2012 (the 'Circular') as amended by subsequent resolutions, primarily the one passed at the January 26, 2015 EGM. Documents are accessible on TCA's website www.terracapitalplc.com in the 'Investor Centre' tab under the Documents and Announcements section of the file 'AIM Rule 26'. This website contains important information which may supplement, modify or differ from the information contained herein and no prospective investment decision should be considered before careful reading of documentation found on TCA's website. All current and prospective investors should be aware that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
By accepting this document, you agree to be bound by the foregoing limitations.
TCA's 4 Quarter 2015 Return & Portfolio
The Fund's NAV increased to $0.925 at December 31, 2015 from $0.9234 as of September 30, 2015, a net NAV return of 0.17% for the quarter.
The Fund's investment level (equity, fixed income and hedging) decreased from 88.25% at September 30 (including commitment to Terra Argentine Fund) to 85.23% at December 31.
Specific Areas of Investment:
Europe
The Fund's exposure to Europe decreased from 26.32% to 24.67%, though it remained the largest regional allocation. The Fund added one position on the quarter (Italy), reduced its exposure in three other positions (Switzerland, Germany and Serbia), while fully liquidating one position (Portugal).
Asia
The Fund's exposure to Asia declined from 18.52% to 16.83%. There was one new position added (Philippines), while four positions were reduced (Bangladesh, Australia, Korea, Vietnam) and one was fully liquidated (Vietnam).
Middle East
The Fund's exposure to the Middle East rose on the quarter from 15.22% to 16.56%. The Fund initiated one new investment (UAE), subscribed to a rights offering in another (Qatar), while increasing one other position (Bahrain). There were no sales in the region during the quarter.
Africa
The allocation to Africa was reduced from 12.83% to 10.23%. One position was increased (Morocco) while two equity positions were fully liquidated (Nigeria, Kenya).
Americas
The Americas increased in concentration from 15.35% to 16.93%. The Fund purchased one new position, but subsequently liquidated it during the quarter.
Fund Details
The following page details the Fund's holdings, changes from the prior quarter, and the total return of each company's shares over the quarter in both U.S. dollars and local currency. The numbers provided are based on TPAM's internal calculations.
Region | Country | Security | Shares | Market value | % of Fund | Change in Share Holdings | 4Q US$ Total Return | 4Q LC$ Total Return |
AFRICA | Burkina Faso | Onatel BF | 47,577 | 1,182,340 | 1.87% | No Change | 10.76% | 15.38% |
Morocco | Residences Dar Saada | 69,843 | 901,323 | 1.43% | Increase | -5.48% | -3.54% | |
Tunisia | One Tech Holding | 248,305 | 855,571 | 1.35% | No Change | 0.66% | 4.48% | |
South Africa | Holdsport | 202,501 | 738,841 | 1.17% | No Change | -8.64% | 2.02% | |
Tunisia | ARTES | 246,934 | 739,021 | 1.17% | No Change | -7.75% | -4.25% | |
Tunisia | Tunisie Leasing | 87,818 | 713,679 | 1.13% | No Change | -20.07% | -17.04% | |
Uganda | Umeme | 2,940,000 | 549,288 | 0.87% | No Change | 13.16% | 3.36% | |
South Africa | Onelogix Group | 2,281,292 | 494,128 | 0.78% | No Change | -39.99% | -33.00% | |
Nigeria | UAC of Nigeria | 2,847,886 | 296,506 | 0.47% | No Change | -34.14% | -34.13% | |
Nigeria | Lafarge Africa | 0 | 0 | 0.00% | Liquidated | -1.24% | -1.22% | |
Kenya | Equity Bank | 0 | 0 | 0.00% | Liquidated | -8.93% | -11.11% | |
6,470,697 | 10.23% | |||||||
AMERICAS | Argentina | Terra Argentine Fund LP Commitment | 2,040,000 | 3.23% | No Change | 0.00% | 0.00% | |
Jamaica | National Commercial Bank Jamaica | 5,431,719 | 1,811,252 | 2.86% | No Change | 42.62% | 44.86% | |
Jamaica | Scotia Group Jamaica | 5,429,031 | 1,358,220 | 2.15% | No Change | 26.15% | 28.13% | |
Argentina | IRSA | 81,433 | 1,001,626 | 1.58% | No Change | -15.41% | -15.41% | |
Peru | Ferreycorp | 2,150,387 | 850,329 | 1.34% | No Change | 1.48% | 7.14% | |
Jamaica | Jamaica Money Market Brokers | 8,500,000 | 729,148 | 1.15% | No Change | 35.23% | 37.35% | |
Argentina | Terra Argentine Fund LP - Series 2 | 510,000 | 704,799 | 1.11% | No Change | 18.72% | 18.72% | |
Argentina | Terra Argentine Fund LP - Series 3 | 510,000 | 615,737 | 0.97% | No Change | 18.72% | 18.72% | |
Peru | Refineria La Pampilla | 17,808,102 | 599,863 | 0.95% | No Change | -22.20% | -17.86% | |
Panama | Copa Holdings | 11,165 | 538,823 | 0.85% | No Change | 17.10% | 17.10% | |
Argentina | Terra Argentine Fund LP - Series 1 | 340,000 | 459,838 | 0.73% | No Change | 18.72% | 18.72% | |
10,709,635 | 16.93% | |||||||
ASIA | Bangladesh | Square Pharma | 629,734 | 2,041,706 | 3.23% | No Change | 1.11% | 1.72% |
Bangladesh | Brac Bank | 2,710,489 | 1,686,911 | 2.67% | Decrease | 17.49% | 18.20% | |
Vietnam | Imexpharm Pharmaceutical | 802,158 | 1,337,822 | 2.12% | No Change | -12.61% | -12.59% | |
China | Qingling Motors | 3,042,615 | 946,143 | 1.50% | No Change | -6.59% | -6.59% | |
Philippines | RFM Corporation | 11,003,750 | 926,656 | 1.47% | New | -0.86% | -0.48% | |
Georgia | Bank of Georgia Holdings | 31,280 | 877,872 | 1.39% | No Change | 2.81% | 5.54% | |
Australia | Ardent Leisure Group | 372,606 | 613,631 | 0.97% | Decrease | -10.07% | -13.38% | |
Korea | Lotte Chilsung Beverage Preferred | 749 | 589,606 | 0.93% | No Change | -4.66% | -5.49% | |
Korea | Kumho Petro Chemical Preferred | 17,850 | 521,039 | 0.82% | No Change | 1.62% | 0.73% | |
Kazakhstan | Kcell | 127,990 | 517,080 | 0.82% | No Change | -22.46% | -22.46% | |
Korea | Shinyoung Securities | 8,370 | 361,849 | 0.57% | No Change | -7.66% | -8.47% | |
Korea | Hyundai Motor Preferred | 2,580 | 226,149 | 0.36% | Decrease | -5.97% | -6.79% | |
Vietnam | Hung Vuong | 0 | 0 | 0.00% | Liquidated | -21.92% | -21.89% | |
Vietnam | Hau Giang Pharmaceutical | 0 | 0 | 0.00% | Liquidated | -0.03% | 0.00% | |
10,646,464 | 16.83% | |||||||
EUROPE | Hungary | Any Security Printing | 553,679 | 1,943,736 | 3.07% | No Change | 5.79% | 9.56% |
Serbia | Galenika-Fitofarmacija | 82,744 | 1,756,770 | 2.78% | No Change | 3.34% | 7.95% | |
Italy | QF Polis | 1,657 | 1,593,512 | 2.52% | Increase | 18.16% | 21.62% | |
Russia | JSC ACRON | 308,792 | 1,559,400 | 2.47% | No Change | 10.75% | 10.75% | |
Macedonia | Komercijalna Banka-Skopje | 28,845 | 1,176,631 | 1.86% | No Change | 1.78% | 9.25% | |
Ukraine | Kernel Holding | 86,323 | 1,057,842 | 1.67% | No Change | 3.51% | 6.89% | |
Montenegro | Crnogorski Telekom | 222,624 | 943,466 | 1.49% | No Change | 0.32% | 3.27% | |
Slovenia | Gorenje Velenje | 175,399 | 876,748 | 1.39% | No Change | -10.63% | -8.00% | |
Poland | PKP Cargo | 42,964 | 749,142 | 1.18% | No Change | -1.80% | 1.41% | |
Croatia | Hrvatski Telekom | 36,228 | 740,301 | 1.17% | No Change | -0.83% | 1.92% | |
Russia | X5 Retail | 29,846 | 565,582 | 0.89% | No Change | 8.91% | 8.91% | |
Bulgaria | Monbat | 115,000 | 510,544 | 0.81% | No Change | 3.65% | 6.64% | |
Italy | QF BNL | 817 | 506,930 | 0.80% | No Change | 0.49% | 3.44% | |
Switzerland | U-Blox | 1,969 | 421,697 | 0.67% | Decrease | 6.24% | 9.38% | |
Estonia | Silvano Fashion Group | 267,000 | 371,374 | 0.59% | No Change | -1.31% | 1.59% | |
Bulgaria | Speedy | 16,818 | 364,076 | 0.58% | No Change | 8.31% | 11.43% | |
Germany | Vib Vermoegen | 19,378 | 359,971 | 0.57% | Decrease | -3.45% | -0.61% | |
Serbia | Komercialna Banka Serbia | 7,231 | 104,978 | 0.17% | Decrease | -13.63% | -9.78% | |
Portugal | Portucell | 0 | 0 | 0.00% | Liquidated | 18.04% | 21.85% | |
15,602,699 | 24.67% | |||||||
MIDDLE EAST | Lebanon | Blom Bank GDS | 144,872 | 1,399,464 | 2.21% | No Change | 0.63% | 0.63% |
Qatar | Al Meera Consumer Goods | 21,218 | 1,281,685 | 2.03% | No Change | -11.93% | -11.93% | |
Oman | Oman Refreshment | 175,000 | 1,009,117 | 1.60% | No Change | -11.20% | -11.20% | |
Qatar | Doha Bank | 77,678 | 949,100 | 1.50% | No Change | -11.35% | -11.35% | |
Bahrain | Gulf Hotel Group | 444,273 | 948,395 | 1.50% | Increase | -3.01% | -3.01% | |
Lebanon | Solidere | 89,508 | 939,834 | 1.49% | No Change | 5.00% | 5.00% | |
Oman | Oman Cement | 720,950 | 861,417 | 1.36% | No Change | 4.55% | 4.55% | |
Oman | Bank Sohar | 2,049,283 | 835,703 | 1.32% | No Change | -2.48% | -2.48% | |
Bahrain | SEEF Properties | 1,333,577 | 714,353 | 1.13% | No Change | 1.00% | 1.00% | |
UAE | Air Arabia | 1,440,000 | 533,304 | 0.84% | New | -2.86% | -2.86% | |
Qatar | Gulf Warehousing Company | 32,600 | 509,312 | 0.81% | No Change | -8.32% | -8.32% | |
Bahrain | Bahrain Commercial Facilities | 200,000 | 405,728 | 0.64% | No Change | 6.25% | 6.25% | |
Qatar | Gulf Warehousing Company Rights | 8,150 | 86,153 | 0.14% | New | 0.00% | 0.00% | |
10,473,566 | 16.56% | |||||||
Total Equity Holdings | 53,903,061 | 85.23% | ||||||
Cash | 9,302,321 | 14.71% | ||||||
Fixed Income | ||||||||
Ukraine | City of Kiev Bond | 0 | 0 | 0.00% | Liquidated | |||
Hedging | 36,142 | 0.06% | Decrease | |||||
Total Fund | 63,241,524 | |||||||
3Q Purchases | 3,382,534 | |||||||
3Q Sales | 5,830,803 | |||||||
Net | -2,448,269 |
* These figures were prepared by the Fund Manager based on its internal records and calculations.
RESPECTFULLY SUBMITTED BY:
Terra Partners Asset Management Limited
Portomaso Tower, 8/5A, Portomaso Avenue,
St. Julian's žSTJ 4011 žMALTA
Regulated by the Malta Financial Services Authority, Reg. No. C 56353
Registered Investment Adviser with the US Securities & Exchange Commission
Contact: Galileo Fund Services Limited (Administrator)
Ian Dungate or Suzanne Jones
+44 1624 692600
Panmure Gordon (Nominated adviser and corporate broker)
Paul Fincham or Jonathan Becher
+44 20 7886 2500
St Brides Partners Ltd
Elisabeth Cowell / Frank Buhagiar
+44 (0) 20 7236 1177
NOTES:
Terra Capital Plc is an AIM quoted investment trust focussed on generating high absolute returns while ensuring volatility is kept to a minimum. The fund predominantly invests in under-researched and under-valued companies. The Fund Manager targets companies that are trading at less than their intrinsic worth and so, aside from any potential growth prospects, provide scope for capital appreciation as a result of a reversion towards underlying value. Investments are also made in companies which are viewed as fair value but offer opportunities for growth at a reasonable price. Due to inherent market inefficiencies, the Fund Manager believes many such 'value' opportunities can be found in Frontier Markets and utilises in-house teams of analysts on the ground in areas of interest to investigate suitable opportunities rather than rely on third party research.
Terra Capital plc issued this content on 12 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 12 February 2016 07:11:22 UTC
Original Document: http://www.terracapitalplc.com/servlet/HsPublic?context=ir.access&ir_option=RNS_NEWS&ir_client_id=6019&item=2357829671321600
