15th Oct 2019 11:54
(Alliance News) - Scottish Oriental Smaller Cos Trust PLC said Tuesday reported a positive return for its recently ended financial year, even as Asian equity markets performed weakly during the period.
For the year to the end of August, the trust reported a net asset value total return of 1.1%. This was compared to a 0.3% return from the MSCI AC Ex Japan Index, a 0.4% positive return from the FTSE All-Shares Index, and an 8.1% negative return from the MSCI AC Asia Ex Japan Small Cap Index.
Scottish Oriental's net asset value per share as at August 31 was 1,158.42 pence, up from 1,156.20p the same date the year before.
The trust's share price at the end of August was 1,010.00p, reflecting a 13% discount to net asset value.
Shares in Scottish Oriental were down 1.6% on the day Tuesday at 998.48 pence, having declined since the year-end.
Market-wise, Scottish Oriental said that Asian markets were weaker, as the US-China trade war drove share prices lower, particularly in October, May and August.
In terms of its portfolio, the trust benefited from its holdings in Taiwan, with all six investments from the region producing double digit returns, and from Hong Kong through its large position in non-alcoholic beverage company Vitasoy International Holdings Ltd.
During the year Scottish Oriental invested GBP108 million, adding 12 new companies to the portfolio.
The trust proposed a dividend of 11.5 pence per share, in-line with the year before.
"While we are cautiously optimistic about the prospects for Scottish Oriental's companies in the coming years, uncertainty abounds and there are many risks in the short term. Should this uncertainty result in significant market weakness we would embrace the opportunity to add to the company's holdings at cheaper valuations, but we believe keeping some powder dry is prudent in the current environment," said Vinay Agarwal and Scott Mcnab, of investment manager First State Investment Management UK Ltd.
By Dayo Laniyan; [email protected]
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