8th Sep 2015 09:27
LONDON (Alliance News) - Baillie Gifford Shin Nippon PLC on Tuesday reported that it grew at a double-digit rate over the first half, bolstered by the rise in Japanese equities.
Managed by Edinburgh, Scotland-based fund manager Baillie Gifford, the company invests in small Japanese companies with the aim of generating capital growth over the long term.
Japanese equities performed better than most other markets around the world during the company's first half, prompting its net asset value per share after deducting borrowings at fair value to rise by 17% in the six months to July 31, a period during which its comparative index - the MSCI Japan Small Cap Index (total return and in sterling terms) - rose by 6.1%.
The trust put the rise in Japanese equities to "strong earnings growth and improving management attitudes" to shareholders. At stock level, its portfolio was boosted by longer term internet-related holdings, while stocks seen to benefit from record numbers of Chinese tourists visiting Japan were among the gainers in the portfolio.
Several new positions were taken during the half, the trust said.
"In keeping with the investment case for several of the existing Internet holdings, Sanwa Co is using the Internet to bypass wholesalers, in this instance to sell kitchens and bathrooms direct to customers," the trust's statement said.
More broadly, the trust said there have been "further signs" that the range of investment opportunities "continues to broaden out".
"The environment for new listings continues to be healthy and we took a new holding in a relatively recent IPO, Sanbio. The company is developing a treatment for strokes based on stem cell technologies. We continue to believe that the long-term prospects for the Japanese biotech industry are improving," the trust said.
Elsewhere, a new holding was taken in Sato Holdings, a radio-frequency identification (RFID) chips company.
"The cost of these electronic tags has fallen sufficiently that major clothing retailers are now using them to keep track of garments remotely throughout the supply-chain and within the retail network," the trust said.
Shares in Baillie Gifford Shin Nippon were down 1.0% at 369.45 pence on Tuesday morning.
By Samuel Agini; [email protected]; @samuelagini
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