30th May 2019 11:17
LONDON (Alliance News) - Aberdeen Japan Investment Trust PLC said Thursday it sharply underperformed against its benchmark in its recently ended financial year, as worsening trade tensions and slowing Chinese economic growth fostered a tough market environment.
For the year to the end of March, the investment trust recorded negative net asset value return of 10.2%, versus 1.2% negative return by the company's benchmark. The benchmark index represents the MSCI AC Asia Pacific Index and the TOPIX index up to October 2013.
Net asset value per share as at March 31 was 607.89 pence, down 11% from 682.31p the same date the year before.
Aberdeen Japan's share price at the end of March was 525.00p, reflecting a 14% discount to net asset value, narrowed from 15% the prior year.
Shares in the investment trust were marginally higher on the day Thursday at 532.60 pence, having improved further since the year-end.
Aberdeen Japan said its financial year was a difficult one for markets, as the trade war between the US and China continued, and China recorded an economic slowdown due to government-induced leveraging.
Portfolio-wise, industrial and technology stocks suffered the worst from the economic blows, becoming the main detractors in the investment trust's performance.
In particular, robot maker Fanuc and reduction gear maker Nabtesco were sold off in the first half, while Yahoo Japan and medical equipment supplier Sysmex remained as detractors.
Aberdeen Japan declared a dividend of 5.40 pence per share, down from 5.20p the year before.
"In the near term, your manager expects that market sentiment will continue to be dictated by slowing global growth and the challenges of trade negotiations. Share prices are likely to be affected by the proposed increase in the planned consumption tax later this year and concerns over the impact of decelerating growth in China, especially on companies with significant exposure to the mainland. Nevertheless, the Japanese stock market remains attractive over the longer term," said Chair Karen Brade.
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