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Aberdeen Asian Income Fund Limited

 

Objective

The objective of Aberdeen Asian Income Fund Limited is to provide investors with a total return primarily through investing in Asian Pacific securities, including those with an above-average yield. The Company does not expect, at least initially, to have any significant Japanese exposure.

Aberdeen Asian Income Fund Limited, Best Asia Pacific Trust, Money Observer Investment Trust Awards 2009


Manager's Monthly Report

June 2009


Markets & Economic Overview

Asian equities rose sharply in May, buoyed by the seemingly benign results of the US bank stress tests, hopes that India’s Congress Party election victory would speed up economic reform and tentative signs that the global recession may be abating. Inflation in China, India and Singapore eased in April. Central banks in Indonesia, the Philippines and Sri Lanka lowered interest rates but others in the region kept rates steady. First-quarter GDP figures were disappointing: Thailand slid into recession, Taiwan contracted at record pace, but India and Indonesia expanded. Hong Kong will spend HK$16.8 billion to lift its economy. In politics, Indonesian president Yudhoyono’s Democrat Party claimed victory in the parliamentary elections, while Pyongyang drew sharp criticism worldwide for conducting nuclear and missile tests.

Portfolio news

In May, we exited Hong Kong Exchanges and Clearing on valuation grounds following the rapid rise in its share price. In other portfolio-related news, Taiwan Semiconductor Manufacturing Company’s profits exceeded expectations, lifted by a rebound in sales due to increased orders from mainland China, as well as by the weaker currency. The chipmaker may invest in alternative energy as it searches for new long-term growth drivers. Singapore lenders United Overseas Bank and Oversea-Chinese Banking Corporation’s operating profits held up well and their provisioning policies have been conservative in anticipation of tougher times ahead.

Strategy & Outlook

Looking ahead, the sheer weight of liquidity may help to maintain the recent rally’s momentum, despite the still uncertain outlook for both economic growth and corporate earnings. Any global economic recovery is likely to be drawn out, given the structural problems that persist in the West and China’s inability to compensate quickly enough for the collapse in demand for Asian exports. As such, we expect a pullback at some stage. But we remain positive about Asia’s long-term prospects, because of its better fundamentals with respect to debt levels and latent demand.


Source: Monthly Factsheet Aberdeen Asset Managers Limited