JPMorgan Russian Securities - Overview

JPMorgan Russian Securities (JRS) is unique in that it is the only investment trust focussed solely on the Russian market. As noted in Performance, JRS is the best performing dedicated Russia fund available to UK investors over the last three, five and ten years (as at 23/11/2021). JRS has been managed by the highly experienced Oleg Biryulyov for over two decades and continues to bring invaluable knowledge of his native Russia to the strategy. Oleg was joined by co-manager Habib Saikaly in 2018.

JPMorgan Russian Securities - Overview

JPMorgan Russian Securities (JRS) aims to generate long-term total returns by identifying the companies in Russia with the best long-term growth prospects. The portfolio includes many traditional value stocks such as those in energy, materials and banking, but also some growth plays via the technology, e-commerce and consumer sectors. Russia is a highly volatile market, but in recent years has generated strong returns for investors. JRS’s ability, as an investment trust, to invest at equal or o

This time next year Rodney...

I once sat through a three-hour performance of Samuel Beckett’s Waiting for Godot at the Theatre Royal which, despite the best efforts of Ian McKellen and Patrick Stewart – both of whom I like very much – to this day remains one of the dreariest experiences of my life. It is on that note that we welcome 2021, with all the promise it holds, and return to our ‘top picks’ for 2020, a year which is probably best summarised (for those of us lucky enough to have been not directly impacted by the virus

A bumper harvest?

In Russian roulette, as in life, we’re often enjoined that: “If at first you don’t succeed, try, try and try again”. Central banks have clearly taken this dictum to heart, and remain highly committed to trying to inject inflation into the global economic system, despite repeated failures in Japan and the West. The immediate impact of the coronavirus pandemic has been deflationary. As a massive economic contraction took place, and an associated output gap opened, demand shortfalls (although butt

JPMorgan Russian Securities - Overview

JPMorgan Russian Securities (JRS) aims to generate long-term total returns from investing in cash- generative businesses in Russia. Despite the fact the index is highly concentrated and volatile, managers Oleg Biryulyov and Habib Saikaly have managed to generate significant levels of alpha (2.5% annualised over the past five years, calculated on NAV performance) on top of the high returns from the Russian market in the period. Over five years Russia has considerably outperformed the general emer

A game of four quarters

“What a difference a quarter makes”, as Dinah Washington’s accountant used to sing. When last we updated on our investment trust picks for 2020 at the end of March, it is fair to say that collective optimism was thin on the ground. However, we all retained ultimate conviction in our selections (or else had grown so despairing at the market environment that we had settled into a kind of other-worldly fatalism), keeping faith that our initial logic had been ultimately sound. This has proved a good

JPMorgan Russian Securities - Overview

JPMorgan Russian Securities (JRS) aims to generate long-term total returns from investing in cash- generative businesses in Russia. Managers Oleg Biryulyov and Habib Saikaly aim to identify national champions which can grow through exposure to international markets; and to avoid those areas of the market with poor corporate governance. In recent years the performance of the trust has been extremely strong in absolute terms. Over five years the Russian market has made impressive gains, massively

Third Quarter of 2019

There was palpable shift in sentiment over the third quarter with the cautionary undertone perhaps best reflected by gold’s resurgence. Ongoing trade jockeying between the US and China did not help the mood and neither did the Argentine debt default in August. At the real economy level, manufacturing output has been trending lower across some of the major global economies.

Outperforming and attractively valued

Since we last wrote on JPMorgan Russian Securities (JRS), Russia has been among the best-performing equity markets globally, despite being out of favour with international investors. The RTS Index has climbed above its 2014 pre-Crimea levels, before sanctions were imposed. Although economic growth has disappointed in 2019, earnings and pay-out ratios continue to grow. At a trailing price-earnings (P/E) ratio of just 6x, the Russian market remains extremely cheap.

Outperforming and attractively valued

Since QuotedData’s last note on JPMorgan Russian Securities (JRS), Russia has been among the bestperforming equity markets globally, despite being out of favour with international investors. The RTS Index has climbed above its 2014 pre-Crimea levels, before sanctions were imposed. Although economic growth has disappointed in 2019, earnings and dividend payout ratios continue to grow. At a trailing price-earnings (P/E) ratio of just 6x, the Russian market remains extremely cheap.

Expert access to attractively valued market

When we last wrote on JPMorgan Russian Securities (JRS), we drew attention to Russia’s deteriorating relationship with the west and how this had impacted on foreign investors’ attitudes towards Russian stocks. Since this time, while sentiment has worsened; Russia’s domestically focused economy appears resilient and its corporates are generally providing good earnings growth. Valuations and yields are therefore all the more attractive.

Expert access to attractively valued market

Russia’s economy benefitted for much of 2018 from a recovery in the oil price and rising prices for a range of other commodities. A weaker rouble has offset the recent oil price fall. Oleg Biryulyov, longstanding manager of JPMorgan Russian Securities (JRS), has many years of experience managing Russian equities. He is comforted by prospect of rising dividends over the coming year.

Beyond politics

Russia’s relationship with the West is deteriorating. A brief period of optimism that accompanied President Trump’s election proved fleeting and recent events suggest that any hope of an easing of sanctions in the short-term is ebbing away. President Putin has secured his election victory but, amid new US sanctions and fears of increasing conflict in Syria, the market suffered its largest fall in four years; who can say what Putin’s next move will be.

Beyond politics

Russia’s relationship with the West is deteriorating. A brief period of optimism that accompanied President Trump’s election proved fleeting and recent events suggest that any hope of an easing of sanctions in the short-term is ebbing away. President Putin has secured his election victory but, amid new US sanctions and fears of increasing conflict in Syria, the market suffered its largest fall in four years; who can say what Putin’s next move will be.

Low valuations and rising yields

Weak oil prices and a deteriorating relationship with the US have weighed on the Russian market for some time. Hopes of a rapprochement with the West in the wake of President Trump’s election have fizzled out. Russia is adjusting to the environment it finds itself in and earnings growth is starting to materialise. Falling inflation has highlighted excessive real interest rates, leaving scope for further interest rate cuts.

UK REITs: Building back better

UK commercial property has been a cornerstone asset for many income-seeking investors (both retail and institutional) in recent decades, particularly since the global financial crisis of 2007/8 and the resulting ultra-low interest rate environment. However, since rates began to rise in 2022 to tackle surging inflation, meaningful returns have once more become available on lower-risk assets such as cash and government bonds, which has led to a retrenchment from alternative income assets such as p

Morning Note – 2 May 2024

Avation - Exercise of ATR 72 purchase rights underpins long-term growth strategy

Avation is a lessor of 34 commercial aircraft to a diversified client base of 16 airlines. This morning, the group has provided an update on its aircraft purchasing strategy, reporting the exercise of purchase rights for 10 ATR 72 aircraft for delivery between Q4 2025 to Q1 2028, which will follow the delivery of two new ATR 72 aircraft in the coming months already on order. In addition, AVAP has been granted new purchase rights and extended its remaining rights for 24 further ATR 72 aircraft, w

REMA - Zoning in on Zonal Pricing

Zonal pricing is now under consideration for implementation in the GB power market. While this is very much not a given, this note summarises the key reports on its potential impacts. We find that while there is an overall reduction in revenues across generation, this may be less than originally predicted and new regional price differences and timing differences may favour storage in Scotland and delay new gas plant construction nationally. We think this later second order impact improves the en

Facilities by ADF - FY23A Results – Trailer-blazing in pursuit of excellence

ADF released FY23A results in-line with our forecasts and the February trading update. As previously highlighted, H1/23A saw record profits whilst H2/23A was disrupted by the now-resolved strike action. The business is ramping back up at the start of FY24E and returning to normal utilisation in H2/24E. Our newly released FY25E forecasts show that with a full year of business as usual, revenues increase c.20% to £56.8m and Adj PAT jumps c.50% to £7.5m. FCF similarly increases to £7.5m, putting th

Molten Ventures - Forward Partners deal completed

Molten Ventures has recently completed the acquisition of Forward Partners, which allowed Molten to further broaden its portfolio, add a complementary strategy focused on earlier stage companies and potentially provide a pipeline of new core holdings. Furthermore, its recent equity raise gave Molten the funds to pursue new investments in what it currently considers a buyer’s market, with an emphasis on the venture capital (VC) secondary market. In FY24 (to end-March 2024), Molten’s gross portfol

Allenby Capital - NAHL Group plc: Finals - Profit and cash to accelerate strongly in FY24 and FY25

FY23 adjusted profits came in slightly above our expectations with results in both divisions reflecting the investments made in the period and in previous years. Despite the continued investment in operations, net debt was reduced from £13.3m to £9.7m and is expected to have fallen to c.£1.3m by end FY25. The year has started well with a subdued market in personal injury offset by a strong start in Critical Care. Consequently, management expects to meet market expectations for the full year.

The Merchants Trust - Celebrating its 135th anniversary

The Merchants Trust’s (MRCH’s) manager, Simon Gergel at Allianz Global investors, is very excited about the number of reasonably priced opportunities available in the UK market. Also, good income generation from the trust’s portfolio of high-quality companies with robust fundamentals enabled MRCH to record another consecutive dividend increase in FY24; it now has a 42-year track record. The trust’s attractive 5.1% dividend yield is one of the highest in the 19-strong AIC UK Equity Income sector

BlackRock Energy and Resources Income

BERI has raised its dividend target as secular tailwinds gather…

BlackRock Smaller Companies

A focus on fundamentals may act as a catalyst for BRSC to bounce back…

Mercantile

MRC’s performance has recovered, yet the trust remains at a wide discount…

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Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

Henderson Far East Income - Repositioning to raise total returns

Henderson Far East Income (HFEL) has consistently delivered on its objective to provide a rising dividend. However, like many investors, HFEL’s managers overestimated the potential for a post-pandemic rebound in China. The trust’s resultant overweight to Chinese consumer and other cyclicals led to a fall in portfolio revenues and underperformance in the financial year ended 31 August 2023 (FY23). With a view to improving future returns, HFEL’s board has since indicated an increased willingness t