(Alliance News) - JPMorgan Emerging Europe, Middle East & Africa Securities PLC on Monday said its net asset value and revenue both dropped over its latest half year due to sanctions on Russian companies, but appeared confident in the resilience of its new investment objective.
The London-based investor in emerging European nations, Middle East and Africa said its NAV at April 30 was 46.8 pence per share, down from 47.1p per share at the same time in 2022. This was, however, slightly up from 46.7p at October 31, 2022.
JPMorgan Emerging Europe said its net assets at April 30 totalled GBP18.9 million, down from GBP19.0 million the prior year.
Revenue after taxation for the half-year ended April 30 fell sharply by 91% to GBP375,000 from GBP4.3 million the previous year. Its return per share at April 30 was 0.93p each, down from 10.56p on the same date last year.
JPMorgan Emerging Europe attributed both decreases to the ban on foreign investors receiving dividends from Russian companies, introduced soon after Russia's invasion of Ukraine. These have completely eliminated the company's revenue from its Russian holdings, it said.
The company had changed its name from JPMorgan Russian in November last year, and announced its new investment objective. This aimed to allow the company to invest in a diversified portfolio of quoted investments in Central, Eastern and Southern Europe, including Russia, the Middle East and Africa.
However, the company said the securities added to its portfolio under the new objective were only acquired towards the end of the period and therefore lacked sufficient time to affect the company's revenue.
JPMorgan Emerging Europe did not declare an interim dividend, but expects to generate enough revenue this year to enable a small final payout for the year ending October 31 as required to maintain its investment trust status.
Dividends paid from holdings in the firm's Russian portfolio are currently held in a custody account in Moscow. Its balance at May 24 was around GBP11.6 million equivalent, but there is no guarantee that JPMorgan will ever receive its dividends. As such, sums in the custody account are not recognised in the firm's net asset value or income statements.
JPMorgan Emerging Europe acknowledged that the Ukraine conflict is unlikely to be resolved, and therefore sanctions in Russia are unlikely to be lifted, in the foreseeable future. However, the firm said its new investment objective "at least helps [us] steer through this very difficult period." It appeared confident that, despite its continued Russian holdings, it can use the new objectives to grow the firm's assets.
Shares in JPMorgan Emerging Europe closed down 2.1% at 98.80p in London on Monday.
By Emma Curzon, Alliance News reporter
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