28th Oct 2015 09:11
LONDON (Alliance News) - Aberdeen Asian Smaller Companies Investment Trust PLC on Wednesday said its net asset value total return in sterling terms fell in its last financial year, as the trust operated against a backdrop of collapsing energy and commodity prices, volatile equity markets in China and weakness in regional currencies across Asia.
Its NAV total return in sterling terms fell by 4.7% in the year to July 31, with about 1.3% of the fall due to currency losses.
This compared to a fall in the MSCI AC Asia Pacific ex Japan Index of 1.2% and the MSCI AC Asia Pacific ex Japan Small Cap Index's return of negative 0.8%. The trust said that "market uncertainty" saw the discount at which its shares trade to NAV widen with a consequent fall in the share price to 790.0 pence from 946.0p.
Aberdeen Asset Management Asia Ltd, part of Aberdeen Asset Management PLC, said it expects conditions to remain "difficult" across Asia, prompting a note of caution about the earnings outlook in the year ahead. The manager said that valuations are "reasonable" with the company's portfolio trading at a forward multiple of around 15.9 times for the financial year 2015 as of the end of July.
"In such a climate, we are sticking to our knitting. We invest in companies with sustainable competitive advantages, capable management and solid financials. These attributes stand out even more in tough times, acting as a buffer against fierce headwinds. They also enable the opportunistic capturing of market share by the merging with or acquiring of more highly leveraged rivals," Aberdeen Asset Management Asia said in a statement.
"We will continue to do what we have been doing well: identify good-quality stocks at a reasonable price and hold them. We believe that our investment approach, based on company due diligence, is key to generating good long-term returns. This is backed by our track record. Over five years and longer, the portfolio has consistently outperformed the benchmark. On a broader level, we remain convinced of Asia's growth potential, underpinned by increasing domestic consumption on the back of a growing middle class," the investment manager said.
Shares in the trust were up 0.2% at 750.71 pence on Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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