Tempted to look because of the high yield - so have just read the accounts - well the figures in the accounts have not read all the blurb yet.
One thing struck me though in the Chairman's Statement
"It is also particularly pleasing to confirm that our dividend has been fully covered by portfolio revenues "
Which of course I interpreted on skimming it that divi was covered by EPS.
But its not.
17 years of increasing dividends is a great track record - but are they always liable to such hyperbolic comments ?
If there were no overheads then investment income covering dividends is great - but there are overheads so to me the fully covered is meaningless in that context... |
The better performing AAIF is 12% below NAV where this is above NAV?! Bonkers. |
AAIF is a much better buy in my view with better performance on well below NAV, inexplicably. |
Portfolio turnover very high. Portfolio value £377m. Investment sales £446m, purchases £440m so sales more than total portfolio. I know this has been a year of portfolio reconstruction and that they have traditionally have had high portfolio turnover but this doesn't paint a picture of stability. |
Apparently China has been rushing through exports to beat any possible embargo imposed by Trump so that could be a possible one off and a tad misleading. |
I see China exports hit a 27 month high. |
Only a small holding here for myself. Skimming the results I think they're pretty decent and pretty positive. Anyone see much downside in the midterm? |
Reads well imo :) and agree it's good to see Dividend revenues increase.
Are China announcing more stimulus tomorrow?
Interesting to see how the US v China story unfolds now Trump is back in power Re: Tariffs. |
Well, it's great to see income rise strongly enough to cover the dividend again but over half of it is from China now, after selling down some countries, so its now a China and Far East Income fund. That's increased the political risk. It's strange how share values have not responded much to a healthy rise in dividends. |
Last few months' growth easing trend abated?
The Caixin China General Services PMI increased to 52.0 in October 2024, up from September's one-year low of 50.3 and surpassing market forecasts of 50.5, after Beijing launched a series of support measures in late September. This marked the highest reading since July, as new business inflows grew for the first time in four months, with a solid rise in export orders. Meanwhile, employment increased for the second consecutive month, though only marginally, while backlogs of work rose slightly for the third straight month. |
Thoughts on US election having an impact? re: China.
Prefer Harris to Trump personally due to his volatility. |
HFEL mentioned ... |
Probably got to the party too late |
India is one of the worst performing Asian stockmarkets in the last month at around -6%. I hope they picked the right stocks. |
A long term holder .... I sold last week, I'd made a slight profit from 2017 as the dividend more than covered the capital loss but trading on a premium and very vulnerable to a divi cut I thought it was time to move on. |
The Central Bank of the Philippines trimmed its benchmark interest rate by 25 basis points to 6% during its October 2024 policy meeting, marking the second consecutive rate cut and aligning with market expectations.... Recent data showed that the country's annual inflation rate slowed sharply to 1.9% in September 2024, from 3.3% in the previous month and falling short of market expectations of 2.5%.
The Bank of Thailand unexpectedly lowered its key interest rate by 25 basis points to 2.25% during its October meeting, marking the first rate cut since early 2020 and a move long advocated by the government. The decision was made amid a sluggish economy and inflation remaining below the lower end of its target range between 1% to 3%. |
Dividend declaration
The directors have declared the fourth interim dividend of 6.20p per ordinary share in respect of the year ending 31 August 2024. The dividend will be paid on 29 November 2024 to shareholders on the register at 25 October 2024 (the record date). The shares will be quoted ex-dividend on 24 October 2024. |
AAIF much cheaper on good NAV discount and better performer. |
Vietnam going strong(er). |
Hang Seng is up just over 30% in 3 weeks after a 6% rise overnight. The last factsheet said 11.9% of assets were invested in Hong Kong at August 31st.
I note South Korean CPI came in at 1.6% versus 2.0% last time and 1.9% forecast. Presumably this creates some leeway for stimulus. A number of Asian countries have seen CPI come in under expectations and below central bank targets in the last month. |
Thanks Aleman! Shame these highs are not (yet?) coming through into HFEL TNAV ps. Am beginning to wonder about their stock selection? and rotation? Also, the spread here has recently widened (for much of the trading day, at least) and it seems like a case of 'buyer fatigue meets MM resistance'. There was a tick up in TNAV ps at the end of the week, and I'd like to see more of that to become dissuaded from my relative gloom, here. Maybe I've just been invested for too long, at the wrong entry cost levels? - and I'm guessing there are many others in the same boat? We need the dividend, but kinda believe that it can't be maintained? Naturally, the 31/8/24 finals (when known) may help demystify matters. |
Thanks Aleman.
What I find a little surprising, given the uncovered dividend, is that they choose to increase it again to 6.2p per quarter (from 6.1p). It smacks of only wanting to be able to claim that there has been a "forever increasing dividend" which is frankly nonsense in this situation. If they froze it now then, using your 5% growth estimate, the dividend would be covered again half way though 2027, about 18 months earlier than if they increase the dividend along the way. That puts less stress on the reserves and just looks far more sustainable.
Guitarsolo |
 Will they have to cut at some stage? Assuming the option income remains steady at around 8% of total income, 5% p.a. revenue growth growth would see a slowly rising dividend covered again in about 5 years, and I think they shuffled a modest portion of the fund to slightly lower payers in the hope of slightly higher dividend growth. I would think of a 5% target as being conservative. I have reservations about selling the likes of Vietnam (cheap) and buying the likes of India (expensive) but I can see that the plan might well work if their stock selection is ok and markets don't even have to do well. One would imagine 10% dividend growth might be possible in a better year, which might eliminate over half the deficit in just one year.
The scale of the problem here seems to be getting exaggerated. It does not appear to be a big problem. I think the problem is more the inconsistencies in recent communication of policy. Is it poor policy or just poor communication. If they know what they are doing, we will be fine. They need to prove that they know what they are doing, though. I still have some doubts.
Year Revenue Div
2020 23.71 23.0
2021 23.22 23.4
2022 24.41 23.8
2023 20.92 24.2
2024 21 ? 24.6 ?
2025 22.1 ? 25.0 ?
2029 26.4 ? 26.4?
(Growth is picking up in a number of Asian countries and it is possible that interest rate rises there will lift their currencies as the west cuts rates. Currency moves could do some of the heavy lifting for HFEL revenues. Just a thought, not a prediction.) |
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