Scottish Oriental Smaller Companies Trust (SST); NAV/sh falls 2.4% for FY18

Published on 16-10-2018 08:01:48
Author Sparks Team

For year ended 31 August 2018, NAV per share has fallen 2.4% y-o-y in total return terms. This compares to the MSCI AC Asia ex Japan Index and the MSCI AC Asia ex Japan Small Cap Index, which rose 2.2% and 1.3%, respectively.

Scottish Oriental Smaller Companies Trust commented that the exposure to domestic companies in Indonesia, Pakistan, the Philippines and Sri Lanka dragged down the returns last year. Currencies of these countries have weakened over the year, creating a difficult operating environment and negatively impacting returns when measured in sterling. China, Hong Kong and India were the major positive contributors during the year.

The company’s income per share increased to 9.19p over the period from 6.77p last year. The company proposed to keep its dividend per share unchanged at 11.5p and plans to fund the short fall from revenue reserve, reflecting its policy of using the reserve when necessary. During the year, the company bought back more than 1m ordinary shares into treasury at a total cost of around £10.9m. The company has 1.5m shares in treasury at the year end.

Scottish Oriental remains confident that its portfolio offers better value and faster growth compared to last year, despite the historic high price earnings ratio. The company commented that the recent market weakness has created opportunities to add to the trust’s positions in some of the preferred companies at more reasonable valuations.

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