LONDON (Alliance News) - Aberdeen Latin American Income Fund Ltd Friday said it underperformed its composite benchmark in the first six months of its financial year.
In the six months to the end of February, net asset value total return in sterling terms was minus 9.1%, underperforming the composite benchmark's minus 7.2% total return.
The fund's shares delivered a share price total return of minus 14.0% for the six months. Having traded at a discount, the fund was active in buying back its shares.
During the six month period it bought back 695,000 shares at a cost of GBP563,000. They are are currently held in treasury. An additional 270,000 shares have been bought back since the period-end and are also held in treasury.
"Regional stockmarkets have steadied somewhat after a shaky start to 2014, but the Fed's ongoing reduction of its monetary stimulus and its future policy actions are likely to continue influencing market sentiment. A further slowdown in Chinese growth could also add to market volatility," Chairman Richard Prosser said in a statement.
Prosser said investor attention will likely be focused on Brazil and Colombia, where both incumbent presidents are seeking re-election.
"But while Colombian president Juan Manuel Santos's electoral chances are boosted by robust economic growth, record-low unemployment and the absence of significant political scandals, his counterpart in Brazil faces the challenge of convincing an increasingly sceptical electorate that the economy can return to better health," Prosser said.
"President Dilma Rousseff, or whoever wins the election, will have to increase taxes, make deep budget cuts, and come up with other concrete measures to address Brazil's financial imbalances," Prosser said.
But the chairman said the region's fundamentals should remain supportive of growth in the long run, pointing to governments' relatively low debt levels.
"Potential growth rates, despite being downgraded in recent months, also compare favourably against many of their developed counterparts. At the corporate level, many of the investments within the portfolio are also adjusting to a weaker environment. Earnings growth is expected to improve while valuations remain compelling," Prosser said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
Copyright © 2014 Alliance News Limited. All Rights Reserved.