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abrdn New India lags behind index in market "rife with volatility"

23rd Nov 2023 14:17

(Alliance News) - abrdn New India Investment Trust PLC on Thursday said net asset value increased with a positive net return in its latest half year, although it was outperformed by its benchmark.

The London-based, India-focused investor said NAV at September 30 was 725.75 pence per share, up 13% from 641.32p at March 31.

The company swung to an NAV total return of positive 13.2% for the six months that ended on September 30, compared with the negative 8.0% for the period that ended on March 31.

Chair Michael Hughes said this "sharp turnaround" was "undoubtedly welcome news", but that the portfolio had nonetheless "lagged" behind the benchmark MSCI India Index which delivered positive 17.1% following the prior half's negative 6.0%.

"The bulk of the underperformance can be attributed to the fund's holdings in financials, consumer, and energy sectors," Hughes explained. "The biggest contributors were the large active position in real estate and stock selection in health care.

On the macroeconomic backdrop, he commented: "India has defied a global environment rife with volatility and uncertainty to stage an impressive comeback over the last six months, galloping ahead of developed and emerging markets alike."

abrdn New India views the country as "one of the best emerging market opportunities" going forward, despite headwinds such as vulnerability to oil price fluctuations.

"However, despite these near-term obstacles, we remain positive on India over the long term," Hughes said. "The company's downside is well protected given our quality focus, and our defensive holdings are in a good position in case of profit taking.

"The consistency of earnings growth of the portfolio remains healthy and individual company fundamentals, such as pricing power, strong balance sheets and the ability to sustain margins, remain solid."

abrdn New India had a cash balance of GBP10.2 million at September 30, up from GBP5.9 million at the same time one year prior.

Shares in abrdn New India were down 1.3% at 592.00 pence on Thursday afternoon in London.

By Emma Curzon, Alliance News reporter

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