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Baillie Gifford Shin Nipon "disappointed" as NAV per share falls

23rd Sep 2022 14:39

(Alliance News) - Baillie Gifford Shin Nippon PLC on Friday reported a fall in net asset value per share as confidence in Japanese internet companies wavered.

Over the six months to July 31, the company's NAV per share declined by 4.8% to 167.3 pence at July 31 from 175.9p at January 31. The MSCCI Japan Small Cap Index, the company's benchmark, increased by 0.9% in the same period.

The company's share price decreased by 9.9% during that time. Shares in Baillie Gifford Shin Nippon were trading 0.1% higher at 155.73 pence on Friday afternoon.

The small Japanese companies investment fund reported positive contributions from a wide range of companies, such as GA Technologies Co Ltd, an online real estate company; Shoei Co Ltd, a motorcycle helmet manufacture; and Yonex Co Ltd, a sports equipment manufacturer.

However, the shares of many of the internet- and semiconductor-related companies performed poorly. This was despite the "impressive rates of sales and profit growth" recorded by companies in the sector.

Baillie Gifford Shin Nipon said it was "disappointed by the weak performance" but said this was not unexpected after a period of "strong outperformance" and given the "extremely challenging environment" for the kinds of companies in which Baillie Gifford Shin Nippon invests.

Despite the challenging environment, the managers remain confident that the high-growth companies in the portfolio are well placed to deliver attractive returns over the long term given their "adaptability and growth opportunity."

The interim management team said: "Young, high-growth companies may feel less safe to many investors currently, but we believe that they represent the future of Japan's economy. Long-term growth is for us a more logical place to be in case of elevated levels of inflation compared to a flight into value stocks. We therefore remain excited about the potential of smaller companies in Japan."

By Chris Dorrell; [email protected]

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