20th Sep 2018 12:16
LONDON (Alliance News) - Aberdeen Frontier Markets Investment Co Ltd said on Thursday it substantially lagged its benchmark over its financial year due to underperformances from its investments, particularly in India and Pakistan.
Aberdeen Frontier, which invests in regional funds, reported a negative net asset value return of 10.3%, compared to a positive return of 1.7% for the MSCI Frontier Markets Index.
Aberdeen Frontier's net asset value as at June 30 was 61.27 pence per share as at June 30, down from 71.37p for the same date a year before.
The company's share price as at June 30 was 55.75 pence, reflecting a 9.0% discount to net asset value, widened from 8.0% at the start of the year.
Shares in the investment company were down 0.8% at 52.10 pence on Thursday.
Aberdeen Frontier said its performance was hindered by four factors during the period. One was the portfolio's exposure to Pakistan, which left the benchmark the prior year and suffered from an equity decline, and an overweight position in Sri Lanka, which saw a declining market due to a poor harvest and fiscal austerity.
Foreign ownership restrictions hampered the company's holdings in off-benchmark Vietnam names, and Kuwait made gains due to a stronger oil price, however Aberdeen Frontier had only an underweight position in the country.
"The company's investments in Pakistan, Vietnam and Sri Lanka underperformed while the underweight exposure, relative to the Index, of the company to stocks in Kuwait was also unhelpful. Limits on foreign ownership in Vietnam and the effect of countries either leaving (Pakistan) or joining (Kuwait) the Index skewed equity flows overtaking the fundamental case supporting particular stocks in which the company is invested," said Chairman John Whittle.
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