THE FINANCIAL ANALYSIS OF OUR EXPERT
IPRO Growth Fund Ltd. (“IGF”) shed 0.8% this month. The fund’s foreign and domestic portfolios moved in opposite directions in August. Foreign holdings weakened as international markets resumed their declines. Local investments experienced better fortunes on average, which helped mitigate losses.
In Mauritius, the SEMTRI managed to reverse course after months of successive losses. The index turned in 4.2% in August, driven by the share price rebound of The Mauritius Commercial Bank Group (MCBG; +11.3%), as fears over a potential downgrade of the bank by Moody’s faded. MCBG will likely retain investors’ focus over the next couple of weeks, given the upcoming release of its (June 2022) financial year results. August also saw positive momentum amongst hotels stocks, likely due to improving statistics for the sector, with July 2022 arrivals recovering to 80% of arrivals for the corresponding period in 2019. Otherwise, in term of portfolio changes, IGF topped up its position in The Bee Equity Partners Ltd over the period.
On the international front, the FED communicated in August its firm intention to keep monetary policy tight for a while in order to curb inflation which remains well above the target level. This caused investors to revise their interest rate expectations up, which rattled both the equities and bond markets. The deteriorating energy situation in Europe and new lockdowns in China were other factors that weighed on markets in August. The MSCI All Country World Index shed 3.7% during the period. IGF’s foreign portfolio fared better on a relative basis, though it lost ground as well. Foreign exchange (FX) movements did not help this month, as the Mauritian rupee appreciated versus the US dollar, following interventions by Bank of Mauritius on the domestic FX market.
We expect the investment landscape to remain challenging in the foreseeable future, as a result of which short-term performance could take a hit. However, we remind investors that IGF has a long-term horizon. The 10Y return of the fund currently stands at +4.6% on an annualized basis.