June 2009
The FTSE All-Share Index continued its good run rising by 4.2% in May on a total return basis.
Further indications that economic conditions were gently improving helped to maintain risk
appetite with commodity prices firming helped as well by a weaker dollar. Banks, Mining
and Basic Materials out-performed while those areas less exposed to global growth underperformed,
for example, General Retail, Telecoms and Real Estate, under-performed. The FTSE
100 out-performed both the FTSE 250 and SmallCap Indices over the month, however on a
year to date basis the FTSE 100 still lags substantially.
Economic news flow was generally mixed during the month. S&P lowered the UK’s outlook
to negative from stable. The Monetary Policy Committee announced an additional £50bn
of quantitative easing and that rates would remain at 0.5% as CPI fell from 2.9% to 2.3%.
Consumer confidence has demonstrated signs of improvement and retail sales data improved.
Both the manufacturing and services PMI surveys were ahead of expectations suggesting that
conditions are continuing to stabilise.
It was a relatively quiet month in term of trading activity. We added to our holdings in National
Grid, Unilever, Provident Financial and Vodafone given their strong market positions and
attractive yields. In addition, we wrote some put options for Rolls-Royce.
Volatility is likely to remain a significant characteristic of the market, however, where
opportunities present themselves we will continue to add to our holdings which we believe are
attractively valued.
Source: Monthly Factsheet Aberdeen Asset Managers Limited