CC Japan Income & Growth has published its first Annual Report which reflects the period from listing on the London Stock Exchange on 15th December 2015 to 31st October 2016. As at 31st October 2016, and measured in Sterling, the share price has risen by 22.4% while the Net Asset Value has increased by 23.9% since launch. On a total return basis including the interim dividend, the share price and NAV rose by 23.5% and 24.9% respectively. They underperformed the Topix index which returned +32.7% over the same period in Sterling terms. The Board is proposing a final dividend of 2p, which together with the interim dividend of 1p paid in July 2016, meets the Prospectus target.
The chairman’s statement says the absence of cyclical stocks in the portfolio (reflecting the portfolio’s need for yield). He believes the gyrations in the currency also made it a hard environment to perform.
At the stock level, there has been a strong positive contribution from Daito Trust, the leading rental apartment developer, which has benefited from favourable tax incentives, and Pola Orbis, a cosmetics manufacturer, which has experienced strong demand from inbound tourists to Japan. Conversely Kaken Pharmaceutical and Aoyama Trading have been weak due to lowered earnings expectations in the short term, although, in both cases, the long term commitment to shareholder return is undiminished.
CCJI : CC Japan underperforms benchmark since launch