Henderson Far East Income reports on flat year – Henderson Far East Income says that, for the year ended 31 August 2018, its net asset value total return was 1.5% and share price total return -0.6%. These compare to a return of zero on the MSCI AC Asia Pacific ex Japan High Dividend Yield Index and 2.4% for the All-World Asia Pacific ex Japan index. Dividends total 21.6p for the year, an increase of 3.8%. This total was fully covered by revenue.
Extract from the manager’s report
“At the stock level there were some notable successes. Despite having a negative view on the commercial banks in Australia we are very positive on investment bank Macquarie Group which is a beneficiary of the securitisation of infrastructure assets globally as well as a weak Australian dollar. Over the period the stock rose 35% and was the biggest individual contributor to portfolio return. The energy and materials sector has proved a happy hunting ground for both capital and income. Although demand growth for these products is modest the lack of supply has kept oil and commodity prices high. We are heavily weighted in these areas with cement companies Anhui Conch and Taiwan Cement, oil and gas companies PTT and China Petroleum and Chemical, petrochemical company Far Eastern New Century and diversified miner BHP Billiton Ltd were all in the top ten contributors to portfolio return. Although we have avoided the technology component sector on expectation of a slowdown in demand for smartphones and PCs we retained a position in industry leader Hon Hai which, unfortunately, didn’t avoid the sector’s de-rating and was the biggest detractor from returns.”
HFEL : Henderson Far East Income reports on flat year