7th May 2020 14:49
(Alliance News) - Aberdeen New Thai Investment Trust PLC on Thursday said it underperformed its benchmark in its most recent financial year due to its resource sector holdings, amid commodity price weakness.
The Thailand-focused investor reported a negative 16.5% net asset value per share total return for its year ended February 28, lagging behind the negative 12.8% Stock Exchange of Thailand Index total return.
Aberdeen New Thai attributed its underperformance to its resource sector holdings and Banpu Public in particular, along with unit Banpu Power.
"Banpu Public, which has large coal reserves in Indonesia, China and Australia, was hurt by weaker product prices. Banpu Power, a major subsidiary that operates both conventional and renewable power generation businesses, was meanwhile affected by a power plant outage due to an earthquake in Laos last November. We favour Banpu Power for its plans to invest in cleaner energy resources, but are monitoring its near term operational performance," said Aberdeen New Thai's investment manager, Aberdeen Standard Investments (Asia) Ltd.
The company's NAV per share dropped 19% to 520.22 pence as at February 28 from 641.45p a year before.
Aberdeen New Thai increased its total dividend per share by 5.6% to 19.00p from 18.00p.
Chair Nicholas Smith said: "Covid-19 has dealt a major blow to Thailand's, the region's and the world's economies and markets. How quickly the world recovers from this unprecedented shock depends on how quickly the virus is contained.
"Asia and Thailand may unwind lockdown measures earlier than elsewhere but it seems clear that there will be a global economic recession in 2020 which will affect Thailand. However, Thailand and its neighbouring countries, Cambodia, Laos, Myanmar and Vietnam, will be well placed to benefit when the recovery commences and the speed of supply chain movement away from China increases. Importantly, though, the timeframe for a recovery of inbound tourism to Thailand, a critical element of the success of the Thai economy, is unclear."
Nontheless, Smith said he was "convinced that the portfolio's quality, in terms of its solid fundamentals and intact growth drivers, will continue delivering returns for shareholders, even in these uncertain times."
The company has revised the calculation of its investment management fee, and it will now be charged at an annual rate of 0.9% of the company's market capitalisation, subject to a cap limiting the management fee to the equivalent of 1.15% of total assets minus liabilities.
"Based on the market capitalisation at the close of business on 4 May 2020 the management fee change would result in a reduction in the management fee of GBP96,000 or 13%," Aberdeen New Thai noted.
Shares in Aberdeen New Thai were down 0.2% at 432.14p in London on Thursday.
By Anna Farley; [email protected]
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