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Aberdeen New Thai Investment Trust PLC

 

Objective

The objective of Aberdeen New Thai Investment Trust PLC is to provide shareholders with a high level of long-term, above-average capital growth through investment in Thailand.

Manager's Monthly Report

August 2008


Markets & Economic Overview

The SET Index fell by more than 11% in sterling terms in July, on heightened domestic political uncertainties, inflationary concerns and persistently weak US economic and corporate data. Economic indicators were mixed: despite healthy external trade in June, consumer confidence fell to a record low. In July, inflation rose to a fresh decade-high of 9.2%. In response, the Bank of Thailand raised interest rates to 3.50%, while it lowered its forecast for GDP growth to 5.8%. The government also cut fuel prices and will subsidise transport costs and certain utilities for the next six months in a widely-criticised inflation-relief package worth 46bn baht. Meanwhile, the political temperature continued to rise with the conviction of former house speaker Yongyuth Tiyapairath for vote-buying, court cases against several cabinet ministers and ongoing anti-government protests, as well as border problems with Cambodia.

Portfolio news

In July, there were no major changes to the portfolio. In corporate news, second-quarter profits were generally solid: PTT Exploration and Production's profits grew 82% year-on-year, supported by higher selling prices and growing volumes, while Kasikornbank and Siam Commercial Bank were aided by healthy interest and fee income business. Conversely, Siam Cement was hurt by cost inflation.

Strategy and outlook

Local equities are likely to continue to be affected by domestic economic pressures and ongoing political tussles. Political uncertainty has weighed heavily on the baht, which was among the worst performing regional currencies over the past three months, despite central bank's intervention. Nevertheless, valuations in the equity market have fallen to attractive levels and we will look to add to our holdings opportunistically.


Source: Monthly Factsheet Aberdeen Asset Managers Limited

2 May 2008, Asian Pacific Equities Update


Hugh Young, Managing Director of Aberdeen Asset Management Asia Ltd



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Hugh Young

† Basis of calculation for Net Asset Value Beginning in mid-January 2007, the onshore and offshore currency rates for the Thai Baht diverged following the introduction of exchange controls in Thailand on 18 December 2006. With effect from 23 March 2007, this divergence had reached a material level such that the Trust opted to calculate and publish subsequent daily net asset values using the onshore Thai Baht rate to value Baht-denominated assets. This replaces the offshore rate used historically.