LONDON (Alliance News) – Aberdeen New Dawn Investment Trust PLC on Friday said it suffered in the first half of its financial year, amid a tough time for Asian equity markets.
The trust, which is tasked with generating capital growth through equity investment in the Asia Pacific countries excluding Japan, said the benchmark MSCI AC Asia Pacific excluding Japan Index fell by 16.4%, while the net asset value of the company fell by 17.0%, with both being on a total return basis.
The share price declined by 16.7% (also on a total return basis), ending the period at 154.25p, with the discount to NAV stable at 12.9%.
“Despite the recent market rebound in Asian equities, volatility is likely to persist over the medium term. It will take time for China to transition from an investment-led economy to one driven by domestic consumption and for those companies affected by it to adjust to the new environment. Fortunately, the economic fundamentals in Asia remain strong with most countries holding high levels of foreign currency reserves giving their Central Banks scope to reduce interest rates if economic growth falters,” Chairman David Shearer said.
“Higher US interest rates are now an imminent prospect but the event itself is likely to remove a major source of uncertainty from global financial markets. The recent negative investor sentiment towards emerging markets has punished share prices in Asia and valuations now look reasonable both on a historical and relative basis. While corporate debt levels have risen in certain markets, particularly those that borrowed in US dollars, most Asian companies remain financially prudent and have strong balance sheets with a focus on generating positive cashflow. Those well-managed companies, particularly the ones favoured by your investment manager, are well positioned to benefit from the current environment and to emerge stronger when economic growth returns,” Shearer added.
Shares in Aberdeen New Dawn were flat at 146.75 pence on Friday.
By Samuel Agini; email@example.com; @samuelagini
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