Aberdeen Asia-Pacific Income Fund, Inc. (NYSE AMEX: FAX)

Fund Managers’ Monthly Report

April 2012

• Asian local currency bonds fell in March as investors remained skittish on a lack of clear market leads. Regional growth eased further, with conflicting manufacturing data signals for China’s economy in particular. But inflation expectations rose amid domestic bond supply pressures and political uncertainty.
• U.S. growth data were more mixed, while rising borrowing costs in Spain fuelled contagion fears in the Eurozone. European finance ministers expanded its rescue fund to €700 billion (roughly US$920 billion) to provide a bigger buffer against peripheral instability.
• Most Asian central banks held interest rates steady, whereas the Philippines lowered rates by 25 basis points. Indian policymakers cut lenders’ cash reserve ratio to ease a liquidity crunch.
• Across most markets, the rise in long-term rates outpaced short-term rates. The key market laggards were Indonesia, the Philippines and Thailand, whereas China was resilient.
• Australian bonds rose despite volatility driven by U.S. Treasury yield movements. Ten-year yields were flat, whereas three-year yields fell. Credit spreads tightened while the Australian dollar fell against the U.S. dollar.
• The JP Morgan Asia Credit Index declined 0.13% as investment sovereigns and high-yield quasi-sovereigns underperformed. Regional currencies fell against the U.S. dollar, led by the Indian rupee, Malaysian ringgit and Indonesian rupiah.