Hong Kong investment Trust tops the field

HONG KONG Investment Trust, the small specialist fund that emerged out of Pacific Property, was the best-performing investment trust last year, nearly doubling its net assets per ordinary share.

In the six months to end-December, the split capital trust raised its net asset value by 24 per cent to 44.4p per ordinary share and its total assets by 18 per cent to pounds 13.6m. This meant the total rise in net asset value over the year was 92.5 per cent.

Eric Sandland, managing director of Jupiter Tyndall (Asia), the trust's manager, said the trust had benefited from the strength of the Hong Kong dollar against the pound. Its performance was also aided by holdings of media and retailing stock, which did particularly well.

Dividend income grew strongly, enabling the trust to convert a pounds 32,000 loss into an interim profit of pounds 179,000. The trust is paying an interim dividend of 0.75p a share.

In the short term, Mr Sandland said, the Hong Kong market could go 'either way', having risen from 4,900 to 5,900 since early December. But Jupiter Tyndall believes that Chris Patten, the Governor of Hong Kong, will eventually reach a 'pragmatic' agreement with the Chinese government over democratic reforms, enabling Hong Kong to continue to draw benefit from the mainland's rapid economic growth.

Mr Sandland believes that the media and retailing sectors are still attractive. Property, after recent performance, is also expected to receive a boost from a relaxation in bank lending controls.