19th Nov 2019 11:56
(Alliance News) - Henderson Far East Income Ltd on Tuesday reported a rise in net assets over its financial year, outperforming its benchmark.
At August 31, the trust's NAV per share stood at 358.99 pence, marginally lower than the 359.26p seen at the same point a year before.
Henderson Far East's net assets jumped 6.5%, however, rising to GBP469.1 million from GBP441.0 million a year before. The trust issued 7.9 million shares in the period, explaining the discrepancy.
The trust declared a total dividend of 22.40p, 3.7% higher year on year.
As a result, the trust recorded a NAV total return of 6.5% in the year, outperforming its benchmark - the FTSE All-World Asia Pacific ex Japan Index - which gained 1.7% in the same period. Henderson Far East noted the AIC Asia Pacific Income sector averaged a return of 4.5%.
"Considering the uncertainties impacting global markets, our flat net asset value at the year end was satisfactory. However, adding back revenue earned but paid out as dividends during the year, the total return performance was raised to a very creditable 6.5%," said Chair John Russell.
He continued: "The relatively good performance was driven by stock selection and we benefited from the weakness in sterling, which declined 4.2% against currencies represented in the index. Currency movements are notoriously difficult to forecast and sterling may strengthen against Asian currencies in the period ahead influenced specifically by a resolution of the Brexit negotiations."
The company's fund manager, Michael Kerley, cited "notable contributions" from Chinese consumer stocks as well as real estate and infrastructure trusts and telecommunications.
Looking ahead, Kerley said: "We remain cautiously optimistic on the outlook for Asia Pacific markets. Valuations remain attractive, especially compared to other world markets, and underlying economic growth should prove more resilient than other regions. The weakness in earnings is a concern and a degree of stabilisation is required before becoming more positive on the region as a whole."
Russell said he expects to step down from the trust's board in 2021, which he said will give the company "sufficient time" to select a successor. He has been chair since 2007.
Shares in Henderson Far East Income were 0.2% higher in London on Tuesday at 359.60 pence each.
By Paul McGowan; [email protected]
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