HERMES PACIFIC INVESTMENTS PLC
Unaudited interim results for the six months ended 30 September 2017
I am pleased to report the results and developments at Hermes Pacific Investments plc (“HPAC” or the “Company”) for the six months ended 30 September 2017. During the period under review the Company made a loss of £47,000 which is in line with the loss reported for the corresponding period in the previous year. HPAC had no revenues owing to a lack of any operating business and it continues to manage its costs effectively while bringing the spending to a minimum. The Company continues to seek investments opportunities which would fit its business strategy. At the period end the Company had net assets of £3,884,000 of which cash was £3,774,000.
Review of the Company’s activities
Hermes Pacific Investments plc is an investing company with a focus on investing in the emerging markets of the Far East including South East Asia. An investment can be via an acquisition of an equity interest or direct interests in projects. It made no investments in the six months under review.
The period under review has been influenced by the recent unprecedented national events resulting in the devaluation of sterling further to the outcome of the EU referendum on 23 June 2016, where the UK voters’ decided to leave the European economic zone, and the UK government commencing exit negotiations together with the sudden, unpredicted change of the UK government. The main impact of those changes has been a significant drop in the British currency. The devaluation of the pound against the US dollar, which is a preferred currency for overseas transactions, has affected Company’s investment evaluation process by making opportunities more expensive.
Developments reflecting anti-globalisation moods have been observed not only in Europe but also North America. The sentiment encouraging “we are better off alone” movement can be seen through events such as the election of populist leaders who tend to promote isolationist policies. Since the election of Donald Trump the US has rejected the Trans Pacific Partnership which connects East Asia (excluding China) with the US, Canada, South America and Australasia in a broad-spectrum trade agreement. A similar event to the rejection by the UK of the European economic cooperation model.
This is in contrast to Asia where the trend is reversed. The Association of South East Asian Nations consisting of 10 Member States recently approved the ASEAN Economic Community with free trade and free labour movement. The company’s preferred investment targets are within these emerging economies where countries leaders have recognised greater economic outcomes may be achieve by growing together rather than apart. More so, over 0.5 billion people of the Far East region experienced a drastic change in the standard of living and increased opportunities over the past decade. The region continues to grow faster than the rest of the world. The region’s domestic demand and consumption is bound to be driven by its growing middle class and supported by corporate earnings and the anticipated long period of economic growth.
Despite the uncertainty in the global market, the Company sees great growth potential in the higher-yielding emerging markets. Therefore, while the Company may assess other investment opportunities, Asia remains the focus of its investment strategy.
I would like to thank shareholders for their continued support.
19 December 2016
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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