Taiwan Inv.Trust PLC - Interim Results
03 Novembre 1998 - 5:47PM
UK Regulatory
RNS No 1979v
TAIWAN INVESTMENT TRUST PLC
3rd November 1998
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE SIX MONTHS TO 31ST AUGUST 1998.
CHAIRMAN'S STATEMENT
Total assets of the Company fell by 34.0% to #59.0 million in the six months
to 31st August 1998. This compares with the fall in the Taiwan Stock Exchange
Weighted Price Index of 35.7% over the same period in sterling terms.
Gross revenue was #164,000 for the period compared to #387,000 for the same
period in the previous year. Your directors are not recommending the payment
of an interim dividend.
The start of the period under review coincided with the recent peak in the
stock market which has subsequently been under considerable pressure. This
has been due in part to the increasingly competitive exports from South Korea
and the negative influence these have on Taiwanese economic activity and
corporate profits. Weakness in the NT dollar, where the Government has
approved competitive devaluations, has added to investor strain. Negative
export growth, triggered by weak demand in the region, and slowing domestic
consumption point to a fall in Taiwan's growth rate in 1998 and, probably,
only a modest pick up in 1999. GDP growth of under 5% is now the general
expectation for the current year which is by regional standards an excellent
performance. However, investors have become used to a much higher growth rate
from Taiwan and are less prepared to value limited growth in the current
environment.
The inherent strength of Taiwan's economy can be seen in the Government's
recent attempts to stimulate domestic activity through speeding up the
progress of major public projects. This may have a lagged effect, but could
help smooth the economic cycle through the current difficult phase.
Taiwan stands apart from the less stable economies in South East Asia. A
number of encouraging factors can be identified which suggest that a more
robust performance can be anticipated in the coming months. The all important
electronics sector is reporting a marked improvement in order books prior to
Christmas, and the floods that affected large parts of mainland China over
recent months have now increased demand for construction materials. Much
comment on Asia has stressed the inflationary problems resulting from last
year's currency devaluations, but reduced inflation or even deflation is being
experienced in some countries. Taiwan has year-to-date price inflation of
only 1.4% which should allow for a cut in interest rates from the current 6.5%
level should the Central Bank so desire. The political landscape may move
back to a more normal appearance if the KMT fare better in the year-end
legislative elections. Cross-Straits talks with China could once again be on
the agenda after a break of more than two years. At a technical level, the
stock market could rebound as foreign selling diminishes. Cash levels at
local institutions are now near to historically high levels.
The outlook is far from ideal, but in an Asian context Taiwan continues to
prosper and there are good indications for a more positive stance through to
the year-end.
The level of discount to net asset value at which the share price stands
continues to be a concern to your directors. However, the marketing
initiative of the packaging of shares into Global Depositary Receipts, as
described in the latest Annual Report and Accounts, is still in its infancy
and, with Far Eastern stock markets still in disarray, it may take a little
longer for investors to be attracted to a specialist vehicle such as your
Company. Your directors continue to keep this subject under review.
Norman Lamont, Chairman
3rd November 1998
CONSOLIDATED STATEMENT OF TOTAL RETURN
(incorporating the revenue account)
for the six months to 31st August 1998
(unaudited)
1998 1997
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Realised (losses)/gains - (1,900) (1,900) - 20,588 20,588
on investments
Unrealised (depreciation)/ - (26,442)(26,442) - 2,387 2,387
appreciation on investments
_______ _______ _______ ________ _______ _______
Total Capital (losses)/ - (28,342) (28,342) - 22,975 22,975
Gains on Investments
Income 164 - 164 387 - 387
Exchange (losses)/gains - (426) (426) - 147 147
Results of dealings by (364) - (364) - - -
subsidiary
Investment management and (157) (472) (629) (208) (624) (832)
advisory fees
Investment performance fees - - - - (3,732) (3,732)
Other expenses (585) - (585) (908) - (908)
_______ _______ _______ ________ ______ _______
Net Return on Ordinary (942) (29,240) (30,182) (729) 18,766 18,037
Activities Before
Finance costs and Taxation
Interest payable on bank (1) (2) (3) (2) (5) (7)
overdrafts
_______ _______ _______ ________ _______ _______
Return on Ordinary (943) (29,242) (30,185) (731) 18,761 18,030
Activities Before Tax
Tax on ordinary activities (20) (191) (211) (53) (174) (227)
_______ _______ ________ ________ _______ _______
Return on Ordinary (963) (29,433) (30,396) (784) 18,587 17,803
Activities After Tax
_______ _______ ________ ________ _______ _______
Return/(loss) per Ordinary
share (in pence) (1.35p) (41.37p)(42.72p) (1.10p) 26.12p 25.02p
________ _______ ________ ________ _______ _______
CONSOLIDATED BALANCE SHEET
as at 31st August 1998
31st August 28th February
1998 1998
(Unaudited) (Audited)
#'000 #'000
Equity shareholders' fund 59,010 89,406
====== ======
Net asset value per Ordinary share 82.94p 125,66p
The interim report is being sent to all registered shareholders and copies may
be obtained from the registered office of the Company at 1 Grosvenor Place,
London SW1X 7JJ.
BY ORDER OF THE BOARD
JUPITER ASSET MANAGEMENT LIMITED
SECRETARIES.
END
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