11th Jun 2015 16:56
LONDON (Alliance News) - New India Investment Trust PLC Thursday said it beat its benchmark in its last financial year, citing the investment manager's focus on "defensive business models, healthy balance sheets, proven management, transparency and good corporate governance".
The trust said its net asset value rose by 46.3% to reach 385.49 pence in the year ended March 31, with the share price up 56.4% to 352.00p. That meant the discount at which the shares trade to NAV narrowed to 8.7% from 14.6%. By comparison, the benchmark MSCI India Index (Sterling-adjusted) gained 35.6%.
Chairman Hasan Askari said the Indian stock-market has turned "more circumspect" since the the end of its last financial year, following a rally in the last 12 months.
"While investors still seem genuinely encouraged by Prime Minister Modi's restructuring efforts thus far, they also recognise that economic headwinds and structural shortcomings persist. The BJP's election defeat in Delhi, its first major loss in state elections since it came to power, was also a reminder of the uncertain state of politics in India and how conflicting interests can derail the reform agenda. Whether the new government is able to garner enough support to push through further reforms, such as rationalising the tax system by implementing a nationwide goods-and-services tax or speeding up the approval of infrastructure projects with the Land Acquisition Act, remains to be seen. Retooling the economy is expected to be a long-term undertaking," Askari said.
At the corporate level, earnings growth remains muted and this is reflected in the stock market, with share prices having fallen since the review period ended. This is not necessarily a cause for worry. The best of Indian companies have always thrived in the worst of circumstances and any market correction would be an opportunity to add fairly-priced stocks. Long term, India's prospects remain undiminished," Askari said.
The trust is managed by Aberdeen Asset Management Asia Ltd.
By Samuel Agini; [email protected]; @samuelagini
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