1st Apr 2019 11:05
LONDON (Alliance News) - The Scottish Oriental Smaller Cos Trust PLC on Monday reported a negative return for the first half of its financial year due to a large exposure to Indian companies, as well as poor performances in the Philippines and Sri Lanka.
The trust reported a negative net asset value return of 3.8% for the six months to the end of February.
This compared to the 3.5% negative return from the MSCI AC Asia Ex Japan Index, 3.7% negative return reported by the FTSE All-Share Index, and the 8.6% negative return by the MSCI AC Asia ex Japan Small Cap Index.
Net asset value per share as at February 28 was 1,090.49 pence, down from 1,147.10p the same date the year before and 1,156.20p as at August 31.
Scottish Oriental's share price at the end of February was 970.00p, reflecting a 11.1% discount to net asset value.
Shares in the investment trust were down 0.7% on Monday at 992.60 pence, having improved by 2.3% since the end of the interim period.
Scottish Oriental said the main detractor to its interim performance was its large exposure in India, which had a weak stock market due to a liquidity crisis amongst its non-banking financial firms affecting market sentiment.
There were also poor returns from the Philippines and Sri Lanka, and initially negative investor sentiment in Asian markets as a whole, due to rising interest rates, weaker growth in China and US-China trade tensions.
"The last six months have echoed other recent periods for Asian stock markets - a sell-off caused by concerns about falling growth and rising interest rates has been mitigated by governments and central bankers making soothing noises," Scottish Oriental said.
"In conclusion, we are nervous about economies and stock markets, but are optimistic about the long term prospects for the company's portfolio holdings," the trust added.
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