December 2008
Background
Macroeconomic trends unequivocally deteriorated throughout the world over the past month.
As housing activity, industrial production and consumer spending plunged to multi-decade
lows, Central Banks slashed interest rates in a desperate attempt to restore confidence.
Corporate profit forecasts and capital investment plans were revised sharply downwards in
response to widespread recessionary conditions.
Performance
The majority of global equity markets suffered further losses during November in local currency
terms. Ongoing Sterling weakness slightly cushioned the blow for international investors, but
equity markets still remain on course to record their worst ever calendar-year returns.
Activity
During the period, strong returns from UK Government bonds provided the opportunity to
further reduce exposure to this asset class. The proceeds were used to add to existing positions
in Rio Tinto, Standard Chartered Bank, Petrobras and PTT Exploration and Production.
Outlook
From an economic perspective, there can be no denying the outlook for many economies
around the world is grim. However, now that this is beginning to be reflected in lower financial
asset prices, from an investment perspective, the outlook is improving. Selective reinvestment
from bonds and cash into equities will continue in order to capitalise on numerous attractive
long-term investment opportunities that now prevail.
Source: Monthly Factsheet Aberdeen Asset Managers Limited