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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Adv. Front. Npv | LSE:AFMF | London | Ordinary Share | GG00B1W59J17 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 53.125 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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