23rd Nov 2016 09:36
LONDON (Alliance News) - Aberdeen Japan Investment Trust PLC said Wednesday that its underlying portfolio performed better than its benchmark index in the first half of its financial year, in a more settled Japanese market.
Aberdeen Japan reported its net asset value total return per share for the six months to September 30 was 13.0%, compared to its Topix benchmark index's total return of 21.8% in the same period. However, the equities holding of the trust returned 24.3% before gross expenses over the period, with a 9.3% sterling hedge cutting its return.
The trust's net asset value per share stood at 573.5 pence at September 30, increased from 511.3p at March 31.
The share price of the trust stood at 505.0p at September 30, an 11.9% discount to net asset value, improved from 4477.5p and a 12.5% discount at March 31.
Shares in Aberdeen Japan were flat at 513.00p Wednesday morning.
The fund's investment manager, Aberdeen Investment Management Kabushiki Kaisha, said notable contributors to the positive return were basic materials holdings, including Shin-Etsu Chemical, Kansai Paint and Nippon Paint.
Detractors to the portfolio performance included Aeon Financial Services, which fell after issuing shares, and Japan Tobacco, dragged down by worries over its ability to compete in electronic cigarette products.
"Business sentiment is showing signs of recovery, but the overall macroeconomic environment remains challenging. While the strength of the yen has not been as dire as predicted on corporate profits, consumption remains weak due to low wage growth. The government's exhortation for corporates to raise wages offers a path out of deflation, but the reluctance in the business community presents an obstacle," said Aberdeen.
"With monetary policy increasingly lacking efficacy, a recently approved fiscal package should support some improvement in household spending and government infrastructure spending. However, the outlook for business investment remains bleak," added the investment manager.
By Adam Clark; [email protected]
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