logo-loader
viewAPQ Global

APQ Global's portfolio showed its good shape through stress tests

Snapshot

On the back of last year’s sell-off, APQ sees good value in emerging markets, particularly in Turkey, Argentina and Brazil.

APQ

Quick facts: APQ Global

Price: 68.5 GBX

AIM:APQ
Market: AIM
Market Cap: £53.6 m
Follow
  • Well-diversified portfolio 

  • Markets recovering after tough 2018

  • APQ eyes further private investments

 

What APQ Global does:

APQ Global PLC (LON:APQ) is an investment firm with interests across Asia, Latin America, Eastern Europe, the Middle East and Africa.

The company manages a portfolio of bonds, equities and currencies with a focus on emerging markets.

The bulk of the company’s emerging markets exposure is in financials, followed by energy and basic materials.

How it is doing:

The AIM-listed firm ended the third quarter with “fairly defensive positioning” but is on track to meet its target annual dividend yield of 6%.

It paid a quarterly dividend of US$1.84 cents while book value was US$0.88 per share (69p) at the end of September, while the portfolio "rebounded significantly" in the period.

With credit exposure concentrated in government entities, financials and corporations in the energy sector, portfolio stress tests indicated there would be a 3.6% impact to book value if there was a 10% sell-off in the S&P 500 index, only a 0.02% hit if credit spreads were to widen 10% or a 0.75% dip in value if interest rates in the US were to increase by 1%.

 

Inflection points:

  • Last year the company reduced its emerging market equity portfolio while keeping its two strategic positions in City of London Investment Group and Anglo Pacific Group. APQ added exposure to four Turkish banks, after a sharp sell-off in August, taking advantage of attractive valuations.
  • Most of the company’s overall exposure last year was in credit and government bonds, representing 47.6% of book value, followed by local currency bond exposure (31.9% of book value). EM equities accounted for 19.1% of book value.
  • APQ believes the medium-term outlook will be supportive for emerging market equities, but the near-term impact of trade wars, political and economic uncertainty in Italy and increased tensions in the Middle East and the Gulf will dampen market sentiment.
  • The company remains mindful of risks around the world, with the US-China trade war shows little signs of abating, the monetary policy outlook in the US and Europe increasingly points to a significant slowdown in the world economy going into next year and President Trump continues to throw the book at the post-war economic order.
  • The firm believes its credit portfolio is well diversified geographically, with the largest positions concentrated in Turkey (17.4%), Argentina (14.8%) and Brazil (10.2%). In terms of sectors, credit exposure is largely in government, financials and corporations in the energy sector.
  • In December, the company invested around 1% of its book value in wholesale telecommunications operator BARTR Holdings, buying a 40% equity stake.

 

Blue Sky:

Chief executive Bart Turtelboom said 2018 was a challenging year but APQ weathered the storm quite well and took advantage of the uncertainty in the market to make its first private investments.

The group is looking to make more private investments like BARTR Holdings.

“We now see that real value is appearing in that space, they tend to be very expensive but across financial services, corporate services we see very interesting opportunities,” Turtelboom said.

On the back of last year’s sell-off, Turtelboom said emerging markets offer “very good value”, particularly in Turkey, Argentina and Brazil.

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of APQ Global named herein, including the promotion by the Company of APQ Global in any Content on the Site, the Company receives from said issuer...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

APQ Global hails its 2Q results as 'stellar'

APQ Global Ltd's (LON:APQ) Bart Turtelboom tells Proactive Investor New York that the emerging markets play has 'stellar' second quarter results, ramping up EM currency exposure to 76.2% from 48.9% at the end of the March, while EM equities were bumped up to 28.2% from 12.4%. Turtelboom...

on 26/7/19

3 min read