TORONTO, ON / ACCESSWIRE / October 26, 2021 /Aberdeen Asia-Pacific Income Investment Company Limited (TSX:FAP) (the “Company“), a closed-end investment company trading on the Toronto Stock Exchange, announced today an update on the Company’s transition of domicile from Cook Islands to Singapore, and changes to the Investment Policies in support of the Company’s investment objective.
Timing of Re-domiciliation
The Company’s re-domiciliation to Singapore will become effective upon the transfer from Cook Islands on or about December 16, 2021, subject to regulatory approvals. Upon effectiveness of the Singapore re-domicile, the Company will be re-named abrdn Asia-Pacific Income Fund VCC. Henny Muliany and Hugh Young, will also join the Board of Directors (the “Board”) of the Company as Singapore resident, qualified representatives of the Company’s investment manager, Aberdeen Standard Investments (Asia) Limited (the “Investment Manager”).
This announcement has no effect of the annual redemption feature for the Company announced in August. Further details of the annual redemption will be provided in February 2022, if the parameters set forth in the Company by-laws are met.
Shareholders holding physical share certificates will receive a letter of transmittal to exchange their share certificate(s) for direct registration advice(s) (“DRS Advices”). Under the direct registration system, or DRS, shares will be registered in a shareholder’s name and held electronically in the Company’s records maintained by its transfer agent, Computershare Trust Company of Canada. DRS may also streamline participation in an annual redemption. Existing DRS holders will be mailed a new DRS Statement reflecting the Company’s new name and ISIN/CUSIP number.
Return of Par Value
The Board has determined that 100% of distributions paid in the 2021 calendar year will be a return of paid-in capital out of par value under Cook Islands law. This reduction of par value represents an opportunity for the Company to make a tax-efficient distribution to Canadian taxable shareholders.
Distributions made on the shares held by a person resident in Canada for the purpose of the Income Tax Act (Canada) who holds such Shares as capital property (a “Canadian Holder”) which constitute a return of capital out of par value of the shares do not constitute dividends. Amounts so received generally would not be included in the Canadian Holder’s income but would generally be deducted in computing the Canadian Holder’s adjusted cost base of the shares. All other distributions will be dividends treated as income for Canadian income tax purposes.
The Board also declared a monthly distribution of CAD 2.25 cents per ordinary share payable on November 30, 2021 to all ordinary shareholders of record as of November 19, 2021 (ex-dividend date November 18, 2021), which will also be classified as a return of capital out of par value. Since Singapore legislation does not provide for paid-in capital or par value, the distribution paid in November 2021 will be the final return of par value capital of the shares.
Information for tax reporting purposes will be provided to the Company’s shareholders on a Form T5 in February of 2022.
Changes to Investment Policies
The investment objective of the Company is to obtain current income and achieve incidental capital appreciation. Upon the recommendation of the Investment Manager the Board has adopted changes to certain of the Company’s investment policies.
The Investment Manager believes that the approved changes, as set out below, will enable the Company to deliver higher earnings in line with the Company’s distribution policy and stronger risk adjusted returns through the re-orientation of the Company’s portfolio to higher yielding markets, while also providing greater portfolio diversification by country and company exposures.
The changes adopted by the Board are summarized in the table below.
The maximum country exposure to any one Asia Pacific Country (other than South Korea) is limited to 20% of the Company’s total assets and the maximum currency exposure to any one Asia Pacific Country currency (other than the South Korean Won) is limited to 20% of the Company’s total assets. The maximum country exposure for South Korea is limited to 40% of the Company’s total assets, and the maximum currency exposure for the South Korean Won is limited to 25% of the Company’s total assets.
The maximum country exposure to any one Asia Pacific Country is limited to 30% of the Company’s total assets and the maximum currency exposure to any one Asia Pacific Country currency is limited to 30% of the Company’s total assets.
The Company may invest up to 50% of its total assets in Asia Pacific debt securities rated by Standard & Poor’s Rating Group, Moody’s Investors Service, Inc. or another nationally recognized statistical rating organization, or judged by the Manager to be, below investment grade at the time of investment, and the Company may invest up to 10% of its total assets in Asia Pacific debt securities rated by Standard & Poor’s Rating Group, Moody’s Investors Service, Inc. or another nationally recognized statistical rating organization, or judged by the Manager to be, below B- at the time of investment.
The Company may invest up to 60% of its total assets in Asia Pacific debt securities rated by Standard & Poor’s Rating Group, Moody’s Investors Service, Inc. or another nationally recognized statistical rating organization, or judged by the Manager to be, below investment grade at the time of investment, and the Company may invest up to 15% of its total assets in Asia Pacific debt securities rated by Standard & Poor’s Rating Group, Moody’s Investors Service, Inc. or another nationally recognized statistical rating organization, or judged by the Manager to be, below B- at the time of investment.
Past performance is no guarantee of future results. Investment returns and principal will fluctuate and shares, when sold, may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. NAV returned data includes investment management fees, custodial charges, bank loan expenses and administrative fees (such as Director and legal fees) and assumes the reinvestment of all distributions. The Company is subject to investment risk, including the possible loss of principal. Total return based on net asset value reflects changes in the Company’s net asset value during each period. Total return based on market price reflects changes in market value.
Aberdeen Standard Investments (“ASI”) is the registered marketing name in Canada for the following entities, which now operate around the world under the abrdn brand: Aberdeen Standard Investments (Canada) Limited, Aberdeen Standard Investments Luxembourg Standard Life Investments Private Capital Ltd, SL Capital Partners LLP, Standard Life Investments Limited, Aberdeen Standard Alternative Funds Limited, and Aberdeen Capital Management LLC. Aberdeen Standard Investments (Canada) Limited, is registered as a Portfolio Manager and Exempt Market Dealer in all provinces and territories of Canada as well as an Investment Fund Manager in the provinces of Ontario, Quebec, and Newfoundland and Labrador.
Closed-end funds are traded on the secondary market through one of the stock exchanges. The Company’s investment return and principal value will fluctuate so that an investor’s shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value (NAV) of the company’s portfolio. There is no assurance that the Company will achieve its investment objective. Past performance does not guarantee future results.
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of future financial performance and condition of the Company, are factors and assumptions which, although considered reasonable by the Company, Aberdeen Standard Investments (Canada) Limited, Aberdeen Standard Investments Inc., and/or Aberdeen Standard Investments (Asia) Limited, as applicable, at the time of preparation, may prove to be incorrect. Shareholders are cautioned that actual results are subject to a number of risks and uncertainties, including the completion of the proposed Re-domiciliation and the anticipated benefits of the Re-domiciliation, general economic and market factors, including credit, currency, political and interest-rate risks and could differ materially from what is currently expected. The Company has no specific intention of updating any forward-looking information whether as a result of new information, future events or otherwise.
If you wish to receive this information electronically, please contact Investor.Relations@abrdn.com
SOURCE: Aberdeen Asia-Pacific Income Investment Company Limited
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Oil rises as investors focus on OPEC+ decision amid growing Omicron fears
Oil prices rose on Thursday, recouping the previous day’s losses, as investors adjusted positions ahead of an OPEC+ decision over supply policy, but gains were capped amid fears the Omicron coronavirus variant will hurt fuel demand.
Brent crude futures rose 85 cents, or 1.2%, to $69.72 by 0402 GMT, having eased 0.5% in the previous session.
U.S. West Texas Intermediate (WTI) crude futures gained 85 cents, or 1.3%, to $66.42 a barrel, after a 0.9% drop on Wednesday.
“Investors unwound their positions ahead of the OPEC+ decision as oil prices have declined so fast and so much over the past week,” said Tsuyoshi Ueno, senior economist at NLI Research Institute.
Global oil prices have lost more than $10 a barrel since last Thursday, when news of Omicron shook investors.
“Market will be watching closely the producer group’s decision as well as comments from some of key members after the meeting to suggest their future policy,” Ueno said.
The Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, will likely decide on Thursday whether to release more oil into the market as previously planned or restrain supply.
Since August, the group has been adding an additional 400,000 barrels per day (bpd) of output to global supply each month, as it gradually winds down record cuts agreed in 2020.
The new variant, though, has complicated the decision-making process, with some observers speculating OPEC+ could pause those additions in January in an attempt to slow supply growth.
“Oil prices climbed as some investors anticipate that OPEC+ will decide to maintain the current supply levels in January to cushion any damage on demand from the Omicron spread,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
Fears over the impact of the Omicron variant of the coronavirus rose after the first case was reported in the United States, and Japan’s central bank has warned of economic pain as countries respond with tighter containment measures.
U.S. Deputy Energy Secretary David Turk said President Joe Biden’s administration could adjust the timing of its planned release of strategic crude oil stockpiles if global energy prices drop substantially.
Gains in oil markets on Thursday were capped as the U.S. weekly inventory data showed U.S. crude stocks fell less than expected last week, while gasoline and distillate inventories rose much more than expected as demand weakened. [EIA/S]
Crude inventories fell by 910,000 barrels in the week to Nov. 26, the Energy Information Administration (EIA) said, compared with analyst expectations in a Reuters poll for a drop of 1.2 million barrels.
(Reporting by Yuka Obayashi; Editing by Tom Hogue)
Toronto market hits 7-week low on Omicron uncertainty
Canada‘s main stock index fell on Wednesday to its lowest level in over seven weeks as the United States reported its first case of the Omicron variant that investors fear could impede economic recovery, with the index giving back its earlier gains.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 195.39 points, or 0.95%, at 20,464.60, its lowest closing level since Oct. 12.
Wall Street also closed lower as the U.S. Centers for Disease Control and Prevention said the country had detected its first case of the new COVID-19 variant, which is rapidly becoming dominant in South Africa less than four weeks after being detected there and has spread to other countries.
It might take longer than expected for supply chain disruptions to abate, “especially if we have renewed shutdowns in Asia,” said Kevin Headland, senior investment strategist, Manulife Investment Management.
Still, Headland does not expect the new variant to lead to an economic recession or a bear market for stocks in 2022, saying: “Reaction to headline news provides opportunities for those that have a longer-term timeframe to add in the equity markets.”
The TSX will add to its recent record high over the coming year as the domestic economic recovery helps underpin corporate earnings, but gains are expected to slow from 2020’s breakneck pace, a Reuters poll found.
The technology sector fell 2.7%, while energy ended 1.9% lower as oil was unable to sustain an earlier rally. U.S. crude oil futures settled 0.9% lower at $65.57 a barrel
The materials group, which includes precious and base metals miners and fertilizer companies, lost 2.2%.
Financials were a bright spot, advancing 0.4%, helped by gains for Bank of Nova Scotia as some analysts raised their target price on the stock.
Bombardier Inc was among the biggest decliners. Its shares sank 10.4%.
(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Peter Cooney)
Canada’s TSX to extend record-setting rally; pace of gains to slow: Reuters poll
Canada‘s main stock index will add to its recent record high over the coming year as the domestic economic recovery helps underpin corporate earnings, but gains are expected to slow from 2020’s breakneck pace, a Reuters poll found.
The median prediction of 26 portfolio managers and strategists was for the S&P/TSX Composite index to rise 9.1% to 22,540 by the end of 2022.
That’s a move that would eclipse last month’s record high of 21,796.16 and compares with an August forecast of 22,000. It was then expected to edge up to 23,150 by the middle of 2023.
The index had advanced 18.5% since the start of the year, putting it on track for its second biggest gain since 2009.
“We think the economy and markets will continue to progress further into the mid-cycle phase next year,” said Angelo Kourkafas, investment strategist at Edward Jones. “We are past the strongest point of the cycle, but there is plenty of runway ahead, especially from an economic standpoint.”
Canada‘s economy https://www.reuters.com/world/americas/canadian-economy-posts-annualized-gain-54-q3-october-gdp-seen-up-08-2021-11-30 grew at an annualized rate of 5.4% in the third quarter, beating analyst expectations, and growth most likely accelerated in October on a manufacturing rebound.
“Banks can continue to benefit from an improving economy and reducing loan loss provisions and resource companies can benefit from higher commodity prices,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Combined, the financial services and resource sectors account for 55% of the Toronto market’s valuation.
Nearly all participants that answered a separate question on the outlook for corporate earnings expected earnings to improve. But the pace of growth could slow.
“We expect a decelerating pace of (earnings) growth,” said Chhad Aul, chief investment officer & head of multi-asset solutions at SLGI Asset Management Inc. “In particular, we expect the recent strong earnings growth in the energy sector to begin to moderate.”
The price of oil, a key driver of energy sector earnings, has tumbled 24% since October, pressured by rising coronavirus cases in Europe and the detection of the possibly vaccine-resistant Omicron variant.
Another risk to the outlook could be a reduction in policy support, say investors.
With inflation climbing, the Bank of Canada https://www.reuters.com/world/americas/bank-canada-signals-it-could-hike-rates-sooner-than-expected-2021-10-27 has signaled it could begin hiking interest rates as soon as April and the Federal Reserve https://www.reuters.com/markets/us/powell-yellen-head-congress-inflation-variant-risks-rise-2021-11-30 is mulling whether to wrap up tapering of bond purchases a few months sooner.
“The key is the pace of both fiscal and monetary policy normalization,” said Ben Jang, a portfolio manager at Nicola Wealth. “This process will likely lead to more volatility in markets, potentially returning to an environment where we will see drawdowns of more than 10%.”
Asked if a correction was likely over the coming six months, nearly all respondents said yes.
(Reporting by Fergal Smith; polling by Mumal Rathore and Milounee Purohit; editing by David Evans)
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