Kwok Chern Yeh, manager of Aberdeen Japan Trust PLC

The Trust’s share price rose by 6.8% as the discount to NAV per share reduced from 13.6% to 10.9%.

Since 8 October 2013 (when the Trust’s mandate was changed to Japan-only) to 31 March 2020, on total return basis, Aberdeen Japan Trust’s net asset value (NAV) rose by 74.5% in sterling terms, compared to the Topix benchmark which rose by 64.4%. The share price rose by 71.2%

The Board proposes a final dividend of 9.0p, making a total dividend of 15.0p (2019 – 5.4p) for the year ended 31 March 2020.

This comprises 8.0p revenue return, 3.0p from revenue reserves and 4.0p from capital reserves.

The board believes that a total dividend of 15.0p for the year provides for prudent retention of capital for future investment.

Karen Brade, chair of Aberdeen Japan Trust, said: “These results reflect the company’s exposure to Japanese stocks with good management teams and strong business franchises. Many of them are characterised by sustainable cashflows, strong balance sheets and good access to liquidity.

“Since the change to a Japan-only mandate in 2013, the company’s results have exceeded the index. The Board believes that the company will remain resilient during the global COVID-19 pandemic and, over time, deliver excess returns.”

On the trust’s outlook, Ms Brade added: “While fiscal and monetary stimuli initiated by many governments should help to support economies, the critical questions are how soon will previous levels of economic activity return, and what will be the post-COVID structure of the global economy?

“Many Japanese companies, including those in your company’s portfolio, have strong balance sheets and cash positions and experienced management teams equipped to survive. They are very well placed to maximise opportunities in the future.”

Kwok Chern Yeh, manager of Aberdeen Japan Trust PLC, said: “For many of Japan’s companies, COVID-19 is expected to have a significant impact, at least in the near term.

“While earlier assessments of the impact were focussed on a disruption of the global supply chain for a handful of industries, the spread of the pandemic has now affected the operations of every industry across the globe. The implications will be far-reaching. Whilst fiscal and monetary stimulus will help to support global economies, the more important factor will be how quickly infections have been contained and economic activity can be restored.

“It is worth reiterating that the fundamentals of the underlying stocks within your company’s portfolio remain robust: they retain strong balance sheets and they have endured multiple disruptions in the past. Many are global market leaders in their respective industries, or have businesses that address longer-term structural issues in the country, such as the growing labour shortage due to an ageing population.  

“Their swift and adept responses from the onset of the pandemic have led us to believe that they can weather this storm better than their peers, and have instilled in us greater confidence in their longer term prospects.”