Edison issues initiation on Aberdeen Latin A Inc F

RNS Number : 6634P

Aberdeen Latin American Inc Fd Ltd

11 February 2019

 

London, UK, 11 February 2019

Edison issues initiation on Aberdeen Latin American Income Fund (ALAI)

Aberdeen Latin American Income Fund (ALAI) gives investors exposure to both Latin American equities and government debt, and offers a 4.9% dividend yield. The company is managed by Aberdeen Standard Investments' (ASI) global emerging markets equities and emerging market debt teams. They are cautiously optimistic on the prospects for Latin America in 2019 (favouring the region above other emerging markets), following a series of headwinds in 2018, including a stronger US dollar, rising interest rates, commodity price volatility and a number of important elections. The managers note that commodity prices are stabilising, there is potential for a weaker US currency as the benefits from stimuli and tax cuts fade, and inflation in Latin America is moderating so central banks are more dovish. An improving economic environment in Brazil could contribute towards more robust earnings estimates and higher equity valuations in the region.

ALAI is currently trading at a 11.6% discount to cum-income NAV, which compares with the 9.3% to 16.7% range over the last 12 months, and the range of average discounts over the last one, three and five years of 11.7% to 14.0%. The company has maintained its annual distribution for the last three financial years and currently offers a dividend yield of 4.9%.

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