5th Mar 2014 12:26
LONDON (Alliance News) - Pacific Horizon Investment Trust PLC Wednesday reported an increase in its net asset value per share over the first six months of its financial year, outperforming a fall in its benchmark.
Managed by Baillie Gifford & Co, the trust, which targets capital growth through investment in the Asia-Pacific region excluding Japan, and the Indian Sub-continent, said its net asset value per share rose 0.2% to 182.37 pence in the six months to January 31, while its share price rose 4.3%.
The discount of the share price to net asset value narrowed to 10.4% from 13.9%.
Over the same period the MSCI All Country Asia ex Japan Index fell 6.6% in sterling terms.
"The relative outperformance was as a result of both stock selection and limited exposure to the worst performing markets in the region. Many of our highest conviction holdings outperformed the comparative index by a healthy margin,"
The trust said it is "very aware" of the effect Chinese economic and political reform could have on its portfolio.
"The Third Plenum of the Chinese Communist Party held in November underlined the authorities' desire to work with market orientated models and continue the country's transition towards more sustainable growth. This is in line with our expectations and the portfolio is already positioned accordingly. The holding in Chinese gas companies is a prime example of the emerging commercial benefits of these reforms, with good results overall during the period," the trust said in a statement.
The trust said it is more concerned by "the excessive increase in lending in both the formal and informal banking sectors", known as shadow banking.
The trust said lending by the sector is often made for projects that are "unlikely to ever be commercially viable".
"We do not consider this to be a systemic risk to the Chinese economy, but we believe that there are likely to be significant issues in the banking, property and construction industries - areas where the Company has minimal exposure," the trust said.
Pacific Horizon shares were Wednesday quoted at 166.50 pence, up 0.30 pence.
By Samuel Agini; [email protected]; @samuelagini
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