A Financial Services & An Investment Stock Under Focus: JEMI and JUP

JPMorgan Global Emerging Markets Income Trust

Investment trust, JPMorgan Global Emerging Markets Income Trust plc (JEMI) aims to provide investors with a regular income in the form of dividends plus capital appreciation in the longer term. The company invests predominantly in emerging markets. The company maintains a diversified portfolio in various asset classes such as equities (listed & unlisted), preferred securities, convertible instruments, debt instruments and other liquid asset classes. The portfolio has 50-80 investment instruments. Financial services, Information technology, Energy, Healthcare, Utilities, Industrials and many other sectors in which company looks to invest.

JEMI-Recent news

Some of the investments made by the company as at 30th September 2019 are Sberbank ADR (4.2%), Taiwan Semiconductor Manufacturing ADR (6.7%), China Construction Bank-H (2.7%) etc.

JEMI-Financial highlights for H1 FY19 period ended 31st January 2019

The company generated shareholder’s return of 4.1 per cent in the past six months. The company generated shareholder’s cumulative return of 89.7 per cent in the past three years. The company generated shareholder’s cumulative return of 48.5 per cent in the past five years. These returns include reinvested dividends. During the first half of the fiscal year 2019, the company declared two interim dividends of one penny per share each. The company’s revenue gross return stood at £6,595 thousand in the first half of the fiscal year 2019 as against £5,786 thousand in first half of the fiscal year 2018. The company’s total gross return stood at £3,337 thousand in first half of the fiscal year 2019 as against £37,807 thousand in the first half of fiscal year 2018. The company’s revenue net return on ordinary activities (excluding finance costs & taxes) stood at £5,624 thousand in the first half of fiscal year 2019 as against £ 4,814 thousand in the first half of the fiscal year 2018. The company had cash balances of £1,579 thousand in the first half of financial year 2019 as against £7,337 thousand in the first half of financial year 2018. The company’s net assets declined to £390,383 thousand in the first half of financial year 2019 from £414,976 thousand in the first half of financial year 2018. The company’s net asset value per share declined to 131.5 pence in the first half of financial year 2019 from 139.8 pence in the first half of financial year 2018.

JEMI-Share price performance

On 11th October 2019, while writing at 12:48 PM GMT, JPMorgan Global Emerging Markets Income Trust plc shares were clocking a current market price of GBX 132 per share; which was less by 0.37 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £386.37 million at the time of writing.

On 31st July 2019, the shares of JEMI have touched a new peak of GBX 144.66 and reached the lowest price level of GBX 112.80 on 11th October 2018 in the last 52 weeks. The company’s shares were trading at 8.75 per cent lower from the 52-week high price mark and 17.02 per cent higher than the 52-week low price mark at the current trading level as can be seen in the price chart.

The stock’s traded volume was hovering around 168,833 at the time of writing before the market close. The company’s 5-day stock’s daily average traded volume was 309,332.60; 30 days daily average traded volume- 479,183.73 – and 90-days daily average traded volume – 433,794.33. The volatility of the company’s stock was 6 per cent higher as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.06 with a dividend yield of 3.85 per cent.

The shares of the company have delivered a negative return of 2.75 per cent in the last quarter. The company’s stock surged by 7.72 per cent from the start of the year to till date. The company’s stock has given investors 11.34 per cent of a positive return in the last year.

Jupiter Fund Management PLC

Jupiter Fund Management Plc (JUP) is a financial service provider that offers management of medium- and long-term investments. The company provides management of equity investments for retail, institutional and private investors.

JUP-Recent news

On 11th October 2019, the company announced the third-quarter trading update for the period ended 30th September 2019. The company’s net outflows were recorded at £1.3 billion in Q3 FY19. The assets under management (AUM) declined by £0.8 billion to £45.1 billion by the end of Q3 FY19. The company will release its results for the fiscal year 2019 on 28th February 2020.

JUP-Financial highlights for H1 FY19

AUM (assets under management) stood at £45.9 billion, an increase from the £42.7 million in FY2018. Most of this improvement had been driven by the gains from investment performance of £4.3 billion and market movements. Net outflows decreased to £1.1 billion as compared with the corresponding period of the last year. Net management fees decreased by 8 per cent to £182.9 million against the £199.2 million in H1 FY18, due to lower average AUM as a result of 2018 outflows and negative market movements. Profit before tax reduced by 16 per cent to £81.4 million against the same period in 2018, due to lower revenues from lower average AUM. Basic earnings per share stood at 15.1 pence, a decrease of 13 per cent from the corresponding prior-year period. Interim dividend per share was 7.9 pence and remained flat against the same period last year. Operating margin, before exceptional items, increased by 2 per cent to 47 per cent as compared with the corresponding period of the last year.

The company faces the several risks such as Failure to deliver strategy; Ability to attract and retain critical staff; Ineffective product, Client and geographic diversification; Sustained market decline; Challenges presented by Brexit; Operational control environment; Failure of a critical outsource partner; and Cybercrime.

Mr Andrew Formica’s appointment as the Chief Executive Officer was announced in January following a year during which Jupiter suffered heavy outflows from its flagship bond fund and its share price almost halved.

Mutual funds saw £1.6 billion of outflows, including £0.5 billion from one mandate which switched to a segregated mandate.  Flows in Dynamic and Segregated Bond funds appear to be flat-to-positive after several quarters of outflow.

Although the company’s profitability margins decreased only slightly in the latest period, the business environment does not augur well for its performance. The geopolitical and economic uncertainties in the United Kingdom as well as abroad has caused significant volatility in the market. The Brexit implication, stiff competition, and operational risks may affect the growth of the company.

The company has a decent capital position which supports its dividend pay-out and business policies. The company expects to continue progression on cost reduction, but not at the expense of investments, which could finally deliver higher returns to the investors. Delivering growth through investment excellence remains the priority. The company looks to achieve this through the active, high-conviction approach and its client-centric culture.

JUP-Share price performance

On 11th October 2019, while writing at 12:53 PM GMT, Jupiter Fund Management Plc shares were clocking a current market price of GBX 329 per share; which was more by 3.45 per cent in comparison to the last traded price of the previous day. The company’s market capitalisation was at £1.43 billion at the time of writing.

On 01st July 2019, the shares of JUP have touched a new peak of GBX 435 and reached the lowest price level of GBX 265.54 on 12th December 2018 in the last 52 weeks.

The stock’s traded volume was hovering around 1,569,679 at the time of writing before the market close. The company’s 5-day stock’s daily average traded volume was 1,269,732.40; 30 days daily average traded volume- 1,224,058.63 – and 90-days daily average traded volume – 1,440,187.13. The volatility of the company’s stock was 41 per cent higher as compared with the index taken as the benchmark, as the beta of the company’s stock was recorded at 1.41 with a dividend yield of 5.38 per cent.

The shares of the company have delivered a negative return of 18.52 per cent in the last quarter. The company’s stock surged by 11.19 per cent from the start of the year to till date. The company’s stock has given investors 12.98 per cent of a negative return in the last year.