(Alliance News) - Ashoka India Equity Investment Trust PLC said Wednesday it outperformed its benchmark for the first half of its financial year, despite reporting a negative return.
For the six months to the end of December, the India-focused investment trust's net asset value total return was negative 2.3%. This still was better than the MSCI India IMI Index, which recorded a negative return of 5.2%.
As at December 31, Ashoka's net asset value per share was 106.3 pence, down 2.3% from 108.8p on June 30 last year but up from 97.7p at the end of December 2018.
The trust's share price was 108.5p on December 31, reflecting a 2.1% premium to net asset value. Shares in Ashoka India were up 1.3% on the day Wednesday at 104.36 pence.
The trust said 2019 overall was a weak year for the Indian equity market, as it lagged behind the US and other emerging markets.
Despite the weaker environment, there were still contributors to Ashoka total return, the strongest of which being HDFC Asset Management Co, on a higher market share particularly in the debt mutual fund category.
There was also Nestle India Ltd, a Nestle SA subsidiary, which made a steady performance through new product launches and market penetration, and diagnostics chain Dr Pal Pathlabs Ltd.
"The investment case for India remains strong and compelling. The Investment Manager believes the Indian economy is experiencing a once-in-an-era transformation. The introduction of a Goods and Services Tax is a notable reform simplifying complex tax laws and encouraging greater entrepreneurial productivity through a focus on business rather than tax whilst at the same time, producing higher tax compliance," said Chair Andrew Watkins.
"The world economic fallout resulting from a severe outbreak of the coronavirus cannot be underestimated at this stage and India's economy will not be immune. Whilst risks remain, investment in this well-managed, balanced portfolio of Indian equities should prove rewarding over the medium to long term," Waktins added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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Ashoka India Equity Investment Trust Plc (AIE)