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APQ Global sees growing momentum for emerging market equities

Portfolio stress tests indicate only a 0.02% hit to book value 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%

APQ Global - Brazil
APQ added to its direct exposure to Brazilian equities

APQ Global PLC (LON:APQ) said stress tests of its portfolio show it is good shape to resist widening of credit spreads or increase of US interest rates.

The investment company, which has interests across Asia, Latin America, Eastern Europe, the Middle East and Africa, added to its exposure is emerging markets during the first half of the year to take advantage of growing momentum.

“The company believes that the medium-term global economic growth outlook will be supportive for emerging markets equities,” it said in a half-year statement.

“However, we remain conscious of the multitude of risks around the world: 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.”

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%.

A first-half loss per share of 13.48 cents was down from 19.13 cents a year earlier, while at the end of June the book value stood at 92.67 cents per share, down from 97.84 at the end of December.

Quick facts: APQ Global

Price: 68 GBX

Market: AIM
Market Cap: £53.22 m

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