Hi, my name is Gabriel Sacks. I’m the lead manager of Aberdeen Asia Focus.
The technology sector remains a very important part of Aberdeen Asia Focus at over 20%. We have been taking profit from companies that have done phenomenally well for us in 2025, particularly within the Taiwanese ecosystem.
Going into this year, you’ve seen a very sharp acceleration in the capex that the hyperscalers in the US are spending on AI. And that’s very good for Taiwan and Korea and the whole build-out of the infrastructure that supports AI development.
Potentially we have been taking some profits from the IT hardware space, but we have also been looking for laggards within IT and shifting some of our Taiwanese winners into companies in other parts of the supply chain, such as Hansol Chemical in Korea, which is among our top three holdings in the portfolio today, still trading at a cheap valuation, but very much geared towards the growth in capacity at the memory makers in Korea, such as Samsung and Hynix.
So we have been shifting our exposure in technology somewhat, but we remain excited about the long-term prospects for that sector.
Within the IT services and software space, we’ve also been reducing our exposure, particularly towards software companies. You are seeing some disruption with the emergence of AI agents. Some of that, we believe, is too extreme in terms of the pessimism that has come through, but we had seen slower growth than we were expecting from some of our names in the portfolio, such as Newgen in India, and so we decided to deploy that capital elsewhere.
On the IT services side, we do have some exposure, particularly to a company called FPT Corp in Vietnam. We have been reducing that position a little over time. We are underweight the IT services space in India, where we are a little more concerned around valuations, particularly in the small and mid-cap space, given some change in requirements away from a very labour-intensive model to a more digitalised, AI-first business model.
As we speak, geopolitical events have become front and centre, particularly the conflict involving Iran. That does have repercussions for Asian economies, particularly given they are large importers of oil and LNG from the region.
Therefore, we do have to look closely at all the companies in the portfolio to make sure that they can pass through any rising costs to consumers.
By and large, when we have seen previous periods of rising oil prices, beyond the sentiment impact on share prices, which we have seen in recent weeks, we do not expect any fundamental impact on our businesses.
We also run an extremely diversified portfolio across a range of countries, sectors and themes. Those are more driven by their idiosyncratic factors, the growth in their industries and their particular position versus peers.
Therefore, we do feel that the portfolio is in very good shape to sustain any short-term impact from rising oil prices.
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