Schroder Oriental Income Fund bumps up dividend despite slump in performance

Fri, 29th May 2020

Schroder Oriental Income Fund posted a negative first-half performance but bumped up its dividend, despite warning of more uncertainty ahead. The company declared two interim dividends for the first two quarters of the financial year amounting to 3.8p per share, up from 3.6p on-year. Its net asset value total return per share for the six months through February was negative 5.4%. For the subsequent period from 29 February to 26 May the performance was negative 4.9%. 'The short-term outlook for markets remains uncertain,' the company said, while adding that it was closely monitoring the dividends paid by companies in its portfolio. 'While the revenue return for the six months ended 29 February was broadly unchanged from the first two quarters of the prior year, your board is conscious that dividend receipts by the company may be under significant pressure in the coming quarters as a result of the Covid-19 pandemic.' 'Your manager believes that although Asian dividends will fare better than many regions, the impact of Covid-19 could still be significant.' 'The board is receiving regular information from the manager on the portfolio, and the income that it is expected to generate, over the next few quarters.' 'We take comfort from the fact that the company's revenue reserves are equivalent to nearly nine months' dividends.' 'This could enable us to weather any medium term shortfall in dividends received without jeopardising our payments to shareholders.' Story provided by

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