Half Yearly Report
HERMES PACIFIC INVESTMENTS PLC
Unaudited interim results for the six months ended 30 September 2015
I am pleased to bring investors up to date with the results and developments at Hermes Pacific Investments plc (“HPAC” or the “Company”) in this Chairman’s statement. In my view, the Company’s strong cash balance places us in a position to prosper when investment prospects improve. The results of HPAC for the six-month period ended 30 September 2015 show a loss for the period of £44,000 which is marginally less than a loss of £53,000 for the corresponding period in the previous year. During the period the Company had no revenues as it does not have any operating business. The Company continues to carefully control its costs. At the period end the Company had net assets of £4,028,000 of which cash was £3,954,000.
Review of the Company’s activities
The Company has made some investments in line with its investing policy in companies involved in trade finance for emerging countries and other financial activities operating from the Far East region. These investments have performed as expected. No further investments were made in the period.
Emerging countries have seen exponential growth in recent years, but whilst there are clearly challenges, we do believe many of these markets still have over time far to go before reaching their peak. Countries such as China and India are still in the midst of an expanding urban population, which will inevitably expand consumption rates.
It is also fair to say that emerging-markets do face a number of macroeconomic challenges including a stronger U.S. dollar, weaker commodity prices, and slowing growth in China. Historically, emerging-markets have generally benefited from a declining USD and strengthening commodity prices. But non-U.S. currencies have depreciated significantly relative to the USD in recent times.
Reduced global demand and increased supply from energy and other commodity producers have caused oil and commodity prices to plummet, resulting in a global disinflationary environment and a significant headwind for emerging-market commodity producers. China’s once strong demand for commodities has moderated, as the medium-term growth trend in China continues to slow due to the elevated levels of outstanding credit and housing prices after an extended boom. Government policymakers continue to try to inject enough incremental stimulus into the economy to stabilise growth in the near term without reinflating property and credit bubbles, to mixed effect. Many of these countries, however, continue to face late-cycle pressures, including weak currencies that have spurred rising inflation despite deteriorating growth.
In the light of the above factors the Company may now have to look at investment opportunities in developed countries such as those in mainland Europe as well as in emerging countries in the Far East although no such investments will be made unless shareholders’ approval to a change of investing policy is obtained.
I would like to thank shareholders for their continued support.
21 December 2015
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For further information please contact:
Hermes Pacific Investments Plc www.hermespacificinvestments.com
Haresh Kanabar, Chairman Tel: +44 (0) 207 290 3340
WH Ireland Limited (Nominated Adviser & Broker) www.wh-ireland.co.uk
Mike Coe/Ed Allsopp Tel: +44 (0) 117 945 3470