LONDON (Alliance News) - Edinburgh Dragon Trust PLC said on Wednesday it outperformed its benchmark in the first half of its financial year, despite a negative return due to volatility in Asian markets.
The Asia-focused investment trust reported a negative return on net asset value of 1.1%, compared to the MSCI All Country Asia ex Japan Index, which declined by 3.5%.
Edinburgh Dragon's net asset value per share as at February 28 stood at 412.62 pence, down from 429.36p at the same date the year before, and from 421.54p at the end of August.
The trust's share price at the end of February was 370.00p reflecting a 10.3% discount to net asset value.
Shares in Edinburgh Dragon was 0.5% lower on the day Wednesday at 393.04 pence, having improved since the period-end.
The trust said the half-year period was a volatile one, with rising trade tensions between the US and China, while interest rate rises by the US Federal Reserve lifted the dollar.
This in turn led to tighter policies by Asian central banks to maintain stability, leading to a broad-based sell off in Asian stock markets.
"While the late 2018 market weakness seemed overdone, the opposite has been true for the market's recent rebound. Volatility seems a constant, especially if the US-China trade truce dissipates. It is clear that the trade dispute is part of a larger and more complex tussle for geopolitical supremacy. With both sides still holding deep-seated differences, a solution that fully resolves the conflict may prove hard to attain," said Edinburgh Dragon Trust Chair Allan McKenzie.
"In such uncertain times, it is imperative to focus on company fundamentals. Many of the portfolio's underlying holdings are expected to deliver reasonable profit growth. Their sound financials, including healthy cash generation and balance sheets, also remain supportive of better capital returns," McKenzie added.