23rd Apr 2015 09:17
LONDON (Alliance News) - The Scottish Oriental Smaller Companies Trust PLC said Thursday it underperformed the MSCI AC Asia ex Japan Index in the half year to end-February, although it outperformed the MSCI AC Asia ex Japan Small Cap Index and the FTSE All-Share Index.
The trust saw a total return on net asset value per share of 4.5%, below the 5.9% delivered by the MSCI AC Asia ex Japan Index, but beating out the 2.4% return from the MSCI AC Asia ex Japan Small Cap Index and 4.1% return from the FTSE All-Share Index.
It said that Asian stock markets had performed positively in the half year, with investor sentiment continued to be influenced by the outlook for the global economy. In particular the Philippines saw a "robust" performance over the period as its economy grew strongly, and as a "significant oil importer" it benefited from falling crude prices.
Malaysia, however, as a net exporter of oil was the weakest market. Its budget deficit is expected to widen in 2015, and there is an ongoing financial controversy over a government-owned strategic development company damping the market, Scottish Oriental noted.
Whilst the outlook for India and South East Asia is brighter, China's is less positive. "Recent monetary stimulus suggests that growth challenges are pressing but policies aimed at reducing corruption and increasing the quality of growth need to be endured for China to prosper in the longer term," the trust said in a statement.
"The trust will remain conservatively positioned and endeavour to seek out sustainable franchises at reasonable valuations for the benefit of longer term returns. Nowhere can current valuations be deemed especially attractive," it said in a statement.
Shares in The Scottish Oriental Smaller Companies Trust are trading down 0.8% at 877.90 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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