Atlantis Japan discount widens despite dividend hike – Atlantis Japan Growth Fund has announced results for the year ended 30 April 2020. Over the year, the NAV total return was -3.3%, which compares to a +0.8% return from TOPIX. The discount widened and so investors saw the share price drop by 8.5%. At the 2019 AGM, shareholders approved the board’s recommendation to replace the six monthly redemption facility with a regular dividend. This dividend is 1% of NAV per quarter. For the last three quarters, the dividend has been 2.37p. For the next four quarters it will be 2.17p (reflecting the fall in the NAV).
[The hope was that the quarterly distributions would keep the discount tight. This has not worked so far but COVID-19 might have a lot to do with that.]
The chairman says “The pandemic has wreaked considerable economic damage on Japan with many data points at historic lows. Technically the country is in recession. Earnings in the fiscal year ended March 2020 are estimated to have declined approximately 20% with little clarity over the next year with many companies declining to give guidance due to the many unknowns. However, the company’s lead investment adviser, Taeko Setaishi, believes the social and economic structural changes imposed on Japan, as a consequence of the virus, will create new investment opportunities. The investment advisory team has begun to explore these themes which include, inter alia, expanded M&A activity, reshoring, home tele-work, and digitalisation.”
The manager said “The companies which made a particularly strong contribution to the Company’s’ performance during the period under review included semiconductor production equipment maker Lasertec, semiconductor wafer materials supplier Tri-Chemical Laboratories, disabled employee placement specialist S-Pool, and lawyer/tax accountant marketing support web site operator Bengo4.”
AJG : Atlantis Japan discount widens despite dividend hike