21st Mar 2019 10:53
LONDON (Alliance News) - Aberdeen Standard Asia Focus PLC on Thursday said it outperformed its comparative indices in the first half of its financial year as it managed to avoid much of the volatility in export markets.
The Asian small cap investor posted a net asset value total return of negative 4.5% for the six months to January 31, outperforming the MSCI Asia Smaller Companies Index excluding Japan which had a negative 8.6% total return.
The company was also just ahead of the MSCI AC Asia Pacific Index, also excluding Japan, which had a negative 4.8% return.
Overall, the Asian market was hurt by stock market volatility due to an escalating trade war threat between China and the US as well as concerns during the period of further US Federal Reserve interest rate hikes.
On Wednesday, the Fed left its interest rate unchanged, and said they were likely to stand pat for the rest of 2019.
However, Aberdeen Standard Asia Focus has comparatively less exposure in the Chinese, Korean, and Taiwanese export markets, which helped its performance. Moreover, Indonesia and Thailand, where the company has significant investments, were comparatively stable.
The company's net asset value stood at 1,159.42 pence per share on January 31, down from 1,231.83p per share on July 31 due largely to its investments in India, "succumbed to a liquidity crunch in the financial sector" during 2018.
Chair Nigel Cayzer said: "Volatility is likely to remain the watchword as stock markets react to political and economic developments. It is also clear Asia's economies and companies are seeing a lower rate of growth than that experienced in recent reporting periods. Moreover, 2019 is a crucial election year for Indonesia, India and Thailand, all countries in which the Trust has material exposure.
"That said, while uncertainty remains, these markets are expected to be supported by government spending and expansionary policies, in the run-up to the elections. The big picture for growth remains compelling, underpinned by a young population and an expanding middle class," he continued.
"Moreover, Asia remains the fastest growth region in the world and Asian smaller companies, in which we invest, are trading at the lower end of their historical valuation range. Given the underlying strength of our holdings' businesses and given their financials, we are confident of riding through the inevitable day-to-day gyrations of stock markets."
During the period, the company paid its final dividend for 2018 of 13.00p per share, up from 12.00p in 2017 and its special dividend for 2018 of 4.00p per share, flat from 2017.
Shares in Aberdeen Standard Asia Focus were down 1.2% at 1,030.00 pence on Thursday.
Related Shares:
Abrdn Asiafocus