Interim Management Statement

RNS Number : 3849V

Pacific Assets Trust PLC

28 May 2008

 



Pacific Assets Trust plc

Interim Management Statement

For the Three Month Period from 1 February 2008 to 30 April 2008

Investment Objective

Pacific Assets Trust plc aims to achieve long term capital growth through investment in selected companies in the Asia Pacific region and the Indian sub-continent, but excluding Japan and Australasia.

Performance Summary

Capital Return	As at  30 April  2008	As at  31 January 2008	Movement
Net asset value (000s)	£159,372	£152,105	4.8%
Net asset value per share	134.66p	128.52p	4.8%
MSCI All Country Far East ex Japan Index	268.06	245.76	9.1%
Share price (mid market)	125.25p	115.50p	8.4%
Discount	7.0%	10.1%
Gearing‡	7.9%	5.9%
Total Return#			For the three month period to 30 April 2008
Net asset value			4.9%
MSCI All Country Far East ex Japan Index			9.7%
Share price			8.4%

Sources: F&C Investment Business Limited, Datastream.

‡ - Gearing: equity investments/shareholders' funds

# - All total returns are based on net dividends re-invested

Review for the Period

The Company's net asset value total return for the three month period ended 30 April 2008 was 4.9%, ranking it 6th within its peer group of eight companies. For comparison purposes, the total return from the MSCI All Country Far East ex Japan Index was 9.7%.  The Company's relatively modest weighting in traditional Asian exporters, such as Samsung Electronics and Taiwan Semiconductor, coupled with a positive bias to the ASEAN markets, which struggled to keep up with the regional index, led to the relatively disappointing performance.

During the period, Asian stock markets continued to be affected by lingering concerns over the global credit crisis and the implications of a potential US recession. Significant monetary easing by western central banks helped to avert a systemic financial crisis, however instead the threat of persistent inflation appeared. Rapidly rising international food and fuel prices led to concerns that Asian domestic consumption might slip as household budgets' purchasing power came under pressure.

The best performing stock market during the period was Taiwan. The KMT's victory in the presidential election at the end of March renewed investors' optimism that closer economic relations with the Mainland would, in time, lead to an improved economic outlook for the country. Asset backed securities and financial stocks enjoyed the most sustained re-rating following upgrades to consensus analysts' earnings forecasts. In contrast, the Chinese stock market initially suffered under the malaise of growing food inflation, compounded by the snowstorms of late January and early February. However, following the announcement of a series of A-share market stabilisation measures, evidence that food prices had peaked, and that first quarter corporate earnings had proved resilient, investor sentiment recovered leading to a sharp rebound in the equity market. Despite slowing export growth in line with OECD economic contraction, and the implementation of tighter monetary policy, Chinese macroeconomic growth indicators continue to point towards sustained GDP growth.   

At the corporate level, first quarter earnings have, so far, generally been satisfactory. However limited visibility leaves markets vulnerable to further negative analysts' earnings revisions as risk premiums remain elevated. The portfolio therefore continues to focus on those thematic investment opportunities where earnings visibility is more assured, such as in regional infrastructure, soft commodities, Chinese healthcare and Thai consumption.

Top Ten Holdings 

Company	Country	30/04/08 Percentage of total assets
China Mobile	China	4.4
China Shipping Development	China	4.1
CNOOC	Hong Kong	3.4
Hang Lung Properties	Hong Kong	3.1
GS Engineering & Construction Corporation	South Korea	3.0
Shin Zu Shing	Taiwan	3.0
Hyundai Steel	South Korea	2.8
Chi Mei Optoelectronics Corporation	Taiwan	2.8
LG Corp	South Korea	2.8
IOI Corporation	Malaysia	2.7
Total		32.1

Geographical Analysis 

Country	30/04/08 Percentage of total assets		31/1/08 Percentage of total assets
Hong Kong	18.8		18.7
China	16.6		16.1
Taiwan	16.6		13.5
South Korea	16.3		15.3
Malaysia	8.4		11.2
Thailand	7.6		2.7
Singapore	6.1		8.3
India	4.0		4.9
Indonesia	3.8		4.6
Philippines	1.6		4.0
Liquidity	0.2		0.7
Total	100.0		100.0

The Board is not aware of any significant events or transactions which have occurred since 30 April 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and Key Information

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.pacific-assets.co.uk, or at www.fandc.co.uk.

For further information please contact:

Peter Dalgliesh/Gordon Hay Smith

F&C Investment Business Limited

Tel: [phone]

 

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