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An update from our investment manager, Kristy Fong - 18 May 2020
We are now into the second month of the Covid-driven lockdown. The number of cases, whilst still relatively low relative to the population of India, continues to rise. Mortality rate at least has been considerably low, perhaps a reflection of the young demographics in the country. Some states are performing better than others but there is a real worry of the dislocation in livelihoods of the migrant workforce. The government has extended the nationwide lockdown and continues to restrict activity in districts that, unfortunately, account for more than half of the country's GDP. This lockdown comes with significant economic cost and India has to grapple between saving lives vs. livelihoods. Policy response has been slow and inadequate thus far. The most recent Rs20tn relief package includes the earlier announcements and still largely related to monetary stimulus. Better something than nothing and at the very least, it helps to provide liquidity support to the financial system and MSMEs (micro, small medium enterprises) and providing life-lines to the most needy part of the population. Unsurprisingly, there was little by way of a fiscal stimulus to bolster demand as India needs to watch fiscal spending to avoid a sovereign rating downgrade. On a brighter note, PM Modi has not forgotten his reform agenda. In his recent speech, he spoke about labour and land reform. We will have to await details.
The journey looks challenging but our view on the companies has not changed. We believe that the quality companies in which we invest, with strong balance sheets and strong management teams, should be able to weather the storm better than most. We have been more defensive in our positioning and continue to take a cautious stance, expecting more market volatility in the near term. However, we do see value emerging in certain pockets as there has been indiscriminate selling across the board. Where we see good quality stocks unduly punished, we have opportunistically topped up more by drawing down gearing and we have room to do more should the markets continue to fall.
The Trust remains focused on identifying companies with deep business moats, clear earnings levers and prudent capital management which we believe should deliver sustainable returns over time.
Looking for world-class, well governed companies at the heart of India's growth story
The first-hand quality seeker: intensive first-hand research and regular company engagement help us to identify world-class organisations that we believe can deliver sustainable long-term growth and weather Indian market volatility.
The independent-minded investor: we are not afraid to be different by focusing on those companies and sectors that offer sustained potential to share in India’s long-term growth story, regardless of their index or sector weightings.
The governance champion: we actively engage with companies to improve the treatment of minority shareholders and reject companies we perceive to have poor management, regardless of their short-term momentum or high market profile.
Hear more from our investment manager Kristy Fong:
Kristy Fong is an investment manager on the Asian equities team. Kristy joined Aberdeen in 2004 from UOB KayHian Pte Ltd where she was an analyst.
Kristy graduated with a BA (Hons) in Accountancy from Nanyang Technological University, Singapore. She is a CFA Charterholder.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Joined AAM: August 2010
Nationality: British
Location: Singapore
James Thom is an investment manager on the Asian Equities Team. James joined Aberdeen in 2010 from Actis, the emerging markets Private Equity firm, based in Singapore and covering Southeast Asia.
James graduated with an MBA from INSEAD, an MA from Johns Hopkins University and a BSc from University College London.
Investment Director
Kristy Fong is an investment manager on the Asian equities team. Kristy joined Aberdeen in 2004 from UOB KayHian Pte Ltd where she was an analyst.
Kristy graduated with a BA (Hons) in Accountancy from Nanyang Technological University, Singapore. She is a CFA Charterholder.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Investment Director
Joined AAM: August 2010
Nationality: British
Location: Singapore
James Thom is an investment manager on the Asian Equities Team. James joined Aberdeen in 2010 from Actis, the emerging markets Private Equity firm, based in Singapore and covering Southeast Asia.
James graduated with an MBA from INSEAD, an MA from Johns Hopkins University and a BSc from University College London.
Rachel Beagles worked in financial markets, primarily in equity research and sales from 1990 until 2003. She was co-head of the Pan European Banks Equity Research and Sales Team and a Managing Director of Corporate and Investment Banking Group Division at Deutsche Bank AG from 2000 to 2003.
She is a non-executive director of Blackrock Emerging Europe plc, Schroder UK Mid Cap Fund plc,Gresham House plc and chairman of Securities Trust of Scotland plc.
Mr Hughes joined the Board on 7 September 2016. He is a Director of T. Bailey Asset Management Limited and acting investment consultant to various family offices and charities. He was a Director of Baring Asset Management Limited from 1998, and Chief Investment Officer from 2000, until his retirement in 2007. Prior to this, he was Managing Director of Barclays Capital (previously BZW) and Chairman of the Board of pension trustees. Before ‘Big Bang’ he was a Partner at stockbrokers de Zoete and Bevan.
Mr Hughes is a director of JPMorgan Mid Cap Investment Trust plc.
Appointed a Director on 26 September 2013, Stephen became Chairman of the Audit Committee on 11 September 2014. He qualified as a Chartered Accountant at PwC before starting a career in investment management. He has more than 35 years' experience of managing investment portfolios, most notably twenty years as Head of European Equities at F&C Asset Management and ten years as Head of European and US Equities at British Steel Pension Fund. He is a non-executive Director and chairman of the audit committee of Blackrock Frontiers Investment Trust plc and a non-executive director of JP Morgan European Smaller Companies Investment Trust plc and Polar Capital Technology Trust plc.
Chairman
Senior Independent Director
Rachel Beagles worked in financial markets, primarily in equity research and sales from 1990 until 2003. She was co-head of the Pan European Banks Equity Research and Sales Team and a Managing Director of Corporate and Investment Banking Group Division at Deutsche Bank AG from 2000 to 2003.
She is a non-executive director of Blackrock Emerging Europe plc, Schroder UK Mid Cap Fund plc,Gresham House plc and chairman of Securities Trust of Scotland plc.
Non-Executive Director
Mr Hughes joined the Board on 7 September 2016. He is a Director of T. Bailey Asset Management Limited and acting investment consultant to various family offices and charities. He was a Director of Baring Asset Management Limited from 1998, and Chief Investment Officer from 2000, until his retirement in 2007. Prior to this, he was Managing Director of Barclays Capital (previously BZW) and Chairman of the Board of pension trustees. Before ‘Big Bang’ he was a Partner at stockbrokers de Zoete and Bevan.
Mr Hughes is a director of JPMorgan Mid Cap Investment Trust plc.
Chairman of Audit Committee
Appointed a Director on 26 September 2013, Stephen became Chairman of the Audit Committee on 11 September 2014. He qualified as a Chartered Accountant at PwC before starting a career in investment management. He has more than 35 years' experience of managing investment portfolios, most notably twenty years as Head of European Equities at F&C Asset Management and ten years as Head of European and US Equities at British Steel Pension Fund. He is a non-executive Director and chairman of the audit committee of Blackrock Frontiers Investment Trust plc and a non-executive director of JP Morgan European Smaller Companies Investment Trust plc and Polar Capital Technology Trust plc.
| Year End | 31 March |
| Accounts Published | July |
| Annual General Meeting | September |
| Dividend Paid | n/a |
Kristy Fong presenting New India's interim results'