Baillie Gifford Shin Nippon Beats Benchmark Despite Net Assets Drop

LONDON (Alliance News) - Baillie Gifford Shin Nippon PLC said on Friday it outperformed its ...

Alliance News 15 March, 2019 | 10:25AM
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LONDON (Alliance News) - Baillie Gifford Shin Nippon PLC said on Friday it outperformed its comparative index in its recently ended financial year, but regarded the period as challenging with investor sentiment dampened by global headwinds.

The Japan-focused investment company reported a drop in net asset value per share by 6.1% for the year ended January 31, finishing at 158.8 pence, compared to 169.1p the year before.

The net asset value for the prior year was restated from 845.3p following the five-for-one share subdivision implemented on May 21, 2018.

Baillie Gifford Shin's comparative index, the MSCI Japan Small Cap Index fell by 7.8% over the same period.

Shares in the investment company were up 0.1% at 177.74 pence on Friday.

During the year, the trust said that some of its stocks were negatively affected by weak Chinese demand over the period, caused by a slowdown in China's economy and concerns over the trade spat between it and the US.

Also, a cyclical slowdown in certain sectors seemed to dampen investor sentiment towards Japanese stocks, as they were regarded to be vulnerable to external headwinds.

However, the domestic environment for stocks remained favourable, with near full employment in the Japanese economy encouraging growth.

Portfolio-wise, legal services portal operator and industrial supplier MonotaRO were the largest contributors to performance due to strong growth. However, security sensors developer Optex and engineering firm Nabtesco suffered from substantial falls in orders.

"We remain positive. The start up environment for companies on our radar is changing. Government policies are more supportive. There is generally better access to capital and more importantly there is a new attitude to creating wealth and starting exciting, disruptive technology businesses. The board and the managers remain encouraged by the outlook," said Chairman Neil Donaldson.

By Dayo Laniyan;

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Baillie Gifford Shin Nippon Ord 184.85 522
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