26th Nov 2018 12:35
LONDON (Alliance News) - Aberdeen New India Investment Trust PLC said on Monday it underperformed against its benchmark in the first half of its financial year.
The trust's net asset value as at September 30 was 501.97 pence per share, up 2.4% from 490.00p at the end of March and 491.16p the same date a year before. On a total return basis, net asset value rose by 2.4%, underperforming the sterling-adjusted MSCI India Index, which rose by 4.3%.
The share price of Aberdeen New India as at September 30 stood at 431.50p, reflecting a widened discount to net asset value at 14.0% from 13.5% as at the end of March.
Shares in the trust were up 0.5% on the day at 428.01 pence on Monday.
Aberdeen New India said that the trust's underperformance was due largely to a lack of exposure to the energy sector, which rallied on higher oil price, while low pricing power and higher input cost fears from the materials sector also held the trust back.
However, consumers, IT and financial stocks continued to perform positively during the period.
"Nonetheless, a more testing period awaits India. Moderating credit growth, due to the troubles in the financial sector, could have wide reaching implications across the economy, including the incipient consumption recovery. It could also dampen industrial activity, which has remained stubbornly sluggish despite robust headline growth. The outlook for corporate earnings has also diminished," said Chairman Hasan Askari.
"Companies are turning more cautious as higher energy prices add to cost pressures. Politics is another concern, and not just due to uncertainty over the 2019 general election outcome. Prevailing global worries, including an intensifying trade war, strengthening US dollar and tighter monetary conditions, will also sway sentiment. Against such a backdrop, picking the right stocks is crucial, and your company remains well positioned to navigate the difficult terrain," Askari added.