Aberdeen Asian Smaller Companies has announced interim figures covering the six months ended on 31 January 2015. The total return on net assets was 5.9% in the six months to 31 January 2015. By comparison, the MSCI AC Asia Pacific ex Japan Index and MSCI AC Asia Pacific ex Japan Small Cap Index total returns were 5.9% and 3.8%, respectively. The share price declined by 3.0% over the period to reach 917.5p, reflecting a widening of the discount to NAV from 0.7% to 7.8%.
Within the portfolio, industrial and auto paints maker Kansai Nerolac Paints and lubricants producer Castrol India were lifted by a recovery in the domestic auto sector and optimism over increased discretionary spending. This was helped by lower input costs caused by the lower oil prices. In addition, the new administration’s focus on infrastructure development as a keystone for economic revival aided the share prices of Ramco Cements and industrial gases supplier Linde India. Gujarat Gas performed well helped by plans to merge with sister company GSPC Gas, which should result in significant synergies.
They avoided having much exposure to energy and mining-related stocks, particularly in Australia, which were hurt by the plunge in global commodity prices to five-and-a-half-year lows.
Consumer holdings Godrej Consumer Products and Jollibee Foods outperformed the market. The Philippines’ Jollibee Foods is one of Asia’s largest fast-food restaurant companies, and brisk sales and new store openings have buttressed earnings. In India, Godrej’s bottom-line remained healthy given its leading position in the fast-moving consumer goods industry.
Not all consumer holdings did well, however. Aeon Co (Malaysia), the biggest holding in the Company’s portfolio, saw its share price hurt by rising costs and subdued retail activity amid weaker consumer confidence ahead of Malaysia’s implementation of the goods-and-services tax in April 2015. That said, the managers think retail spending could spike just before the tax is implemented as consumers try to circumvent it. The oil price crash also had an impact on local stocks as Malaysia is a net energy exporter. The share price of Singapore developer Bukit Sembawang Estates also fell. The weak results were expected given the sluggish local property market but they say the company is backed by a solid balance sheet and a decent land bank.
AAS : Aberdeen Asian Smaller hit by widening discount