27th Nov 2019 14:23
(Alliance News) - Aberdeen New India Investment Trust PLC on Wednesday said its substantially outperformed its benchmark in the first half of its financial 2020 on stock selection, with financial companies proving the strongest contributors.
For the six months ended September 30, the Indian companies investor's net asset value total return was 6.1%, far ahead of the 0.8% return posted by the MSCI India Index, its benchmark. Its NAV per share rose to 564.59 pence from 531.90p on March 31.
The firm's investment manager, Aberdeen Standard Investments Asia Ltd, credited this performance to its stock-picking process and its defensive portfolio holdings. Financial firms contributed most strongly to its positive performance,
"Private-sector lenders Kotak Mahindra Bank and HDFC Bank emerged intact from a torrid environment. Their share price resilience stemmed from their experienced management, solid deposit bases and robust balance sheets which set them apart from their peers," said Aberdeen New India.
Chair Hasan Askari said: "A more challenging period awaits India. Softening credit growth, due to the stress in the financial sector, could have further adverse effects across the economy, stifling the incipient consumption-led recovery. It could also weigh on industrial activity which has seen persistent weakness. Additionally, concerns over simmering trade tensions, a strengthening US dollar and decelerating global growth could all affect sentiment."
However, Askari said there were still "attractive structural advantages" to investing in India.
"While we expect to see some short-term volatility for stocks, we remain cautiously optimistic that the market's longer-term potential, coupled with your manager's prudent investing philosophy, will continue to deliver steady growth for shareholders," the chair said.
Shares in Aberdeen New India were up 1.7% at 475.98p in London on Wednesday afternoon.
By Anna Farley; [email protected]
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