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Aberdeen Singapore Equity Fund

Objective

Aims to provide holders with medium to long-term capital growth from a portfolio of Singapore equities.

 

Manager's Monthly Report

January 2015

  • The local stockmarket rose in January on the back of fresh monetary stimulus in Europe and China. Gains were pared by increased risk aversion due to concerns over slowing global growth.
  • The Singapore dollar weakened to levels last seen in 2010, as the central bank unexpectedly lowered the slope of its policy band, owing to a benign inflation outlook. The three-month interbank offered rate, which most home loans are benchmarked against, approached an almost five-year high, driven by a stronger US dollar and new liquidity requirements for domestic banks. This could push up mortgage costs and worsen the slide in home prices. Although sentiment remains weak, our property holdings have solid balance sheets to weather this tough period.
  • In corporate news, Keppel Corp offered to privatise its 55%-owned property subsidiary Keppel Land. We view the opportunistic move, at a time when valuations are depressed, as a bid to diversify from the relatively weak offshore and marine (O&M) sector. That said, the conglomerate, whose full-year results met expectations, continued to win contracts for its O&M business despite the sector’s challenging outlook. In quarterly results, CDL Hospitality Trusts posted healthy occupancy numbers but room rates fell. The firm will acquire two hotels in Japan, seizing the opportunity to enter the buoyant tourism market. Singapore Exchange did well, boosted by robust volumes for China A-share index futures. It also received a good response from investors to its reduction of minimum lot sizes to 100 from 1000 shares.
  • Over the month, we participated in the IPO of Keppel Data Centre REIT. We like its high-quality properties and good growth prospects, given the increasing demand for data centres globally. Furthermore, Keppel Corp is a strong sponsor, and the trust pays a decent 7% dividend yield.