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Aberdeen Asia-Pacific Income Fu Message Board

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  • wp5151 wp5151 Feb 9, 2000 11:16 AM Flag

    Dividend cut?

    depends on currency, in my opionion. If Aus
    remains at $0.65- 0.66 level in next few months
    ($0.63-0.64 now), the FAX asset will be higher than $6.1/s.
    In addition, FAX gets some currency appreciation
    from its Korean investiment. Also, paying high div to
    shareholder is an another way of tender shares from
    shareholder, but has reversal affects on the share price. For
    this reason, I would rather to see FAX using retired
    seculities for tendered shares at NAV, just like South
    Africa Fund did.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Yes, the AUD is the most important single factor
      in FAX's NAV and a major factor in its dividend. The
      great great majority of FAX's Korean debt securities
      are dollar denominated so it can't get any currency
      appreciation. It is possible to get credit appreciation from
      the Korean and other Asian debt which is something
      not likely with the higher credit rating Australian
      debt.
      I can never remember seeing a stock rise on
      announcement of a dividend cut, in fact a significant drop is
      almost universally the norm. The degree of the FAX cut
      could effect market reaction. Dividend concerns most
      certainly could be priced into FAX, so a small cut might
      have little effect. If the monthly dividend drops a
      penny or more, I expect a distinct and noticable drop
      in FAX's share price.
      I wouldn't focus too much
      on any recent rise in FAX's share price. It seems
      most other closed-end bond funds (at least those that
      I follow CGF, DSF, & MSY) have been strong as of
      late.

      • 2 Replies to Sapper588
      • Did some selling, unloaded all my MSY. I think at
        a 3% discount, it's fully valued compared to the
        rest. Had a lot of CGF from the rights ffering and sold
        some there too, into this recent strenght.

        Nice
        to ses a up move on DSF too. I'm a bit disappointed
        it has not traded better, at least back to my cost
        now.

        I "monetizing" looking for the right opportunity on
        a few stocks, FAX for one.
        Any other CEF's you
        like? Been a long time between rights offerings, it's
        always been my lifeblood in this area for new ideas.

      • If EQUITILINK managers understand the consequnce
        of div cut, they will not cut the dividend. Then, we
        may see FAX back to $5.5.

        If they do afraid
        of the falling of NAV, they, instead of cut div, but
        cut portfolio holding and try to match share price to
        NAV by tendering shares as I previously described.
        The FAX's NAV and dividend may lower slightly, but
        not the share price because of share buyback.


        We do not care for the name of FAX! Let it be
        dissolved within ten years!! Equitink managers can also
        start up an Asia Income Fund to absorbed the 10+ yrs
        FAX seculities.

        Note that FAX has 5.2% Korean
        currency

        As of December 31, 1999, the portfolio was
        invested as follows:

        ------- -----Currency ----
        Credit/Geographic
        Australia -------- 74.8% ---- 74.8%
        New
        Zealand -----0.3% ---- 0.3%
        United States ----14.4%
        ---- 0.4%*
        South Korea -----5.2% ---- 11.5%

        Philippines ----- 1.8% ---- 4.2%
        Thailand ---- 2.2% -----
        3.4%
        Malaysia ---- 0.0% ---- 2.4%
        Singapore ----
        1.1% 1.1%

        Taiwan ---- 0.2% ---- 0.2%

 
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5.45-0.0300(-0.55%)Apr 17 4:02 PMEDT