January 2010
December was a fairly quiet month. Macroeconomic news flow was mixed. The markets chose
to focus on the positives and equities generated further positive returns. The FTSE All-Share
Index returned 4.3% and large companies outperformed their smaller counterparts with the
FTSE 100 Index rising 4.4%. This ensured that the major indices ended 2009 at their year highs.
There was positive news when it was announced that Dubai World would receive a US$10bn
bail out from neighbouring Abu Dhabi This removed the fear that the Emirate’s problems would
trigger further difficulties in the global economy. The potential for further negative shocks was
demonstrated by the decision to downgrade Greece’s credit rating and to revise
Spain’s downwards.
In both the UK and US, employment data was better than had been expected though in the UK
at least it was the more volatile part-time rather than full-time jobs that boosted the overall
numbers in employment. The Bank of England made no changes either to interest rates or the
programme of quantitative easing.
There was limited portfolio activity during the month. We top sliced the holding in A.G. Barr
and redeployed the proceeds in topping up Fuller Smith and Turner following a positive meeting
with the management. We also topped up the holdings in Dignity and Umeco.
Source: Monthly Factsheet Aberdeen Asset Managers Limited