Updates

ASA International

July 2019

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The main risk for ASA, which provides microfinance to female entrepreneurs in Asia and Africa, is that it makes its money in local currencies but is obliged to report in US$ so any local currency depreciation can cut into profits. That was why we said “wait for a suitable entry point” in December’s write-up. Results confirmed this issue was worse than expected (and flagged in February) as while “normalised” net profit at constant currency rose 30% to US$32.4m, weakness in Asian currencies, notably Pakistan’s PKR (down 26%) & India’s INR, which fell 9%, meant net profit fell 17% to US$24.5m.However, the business itself is going great guns with the number of clients up 17% to 2.2m and len ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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