Discount Watch

The number of investment companies trading at 52-week high discounts fell to just nine. It wasn’t a good week all round though, one sector saw all five of its constituents set new discount highs for the year.

By Frank Buhagiar• 30 Sep

We estimate there to be nine investment companies that saw their share prices trade at 52-week high discounts over the course of the week ended Friday 27 September 2024 – two less than the previous week’s 11.

It’s not often all funds in one sector see their share prices set new 52-week high discounts to net assets on the very same day. But that’s what happened with the five-strong Japan sector. True, the share prices of the five investment companies – Baillie Gifford Japan (BGFD), CC Japan Income & Growth (CCJI), Fidelity Japan (FJV), JPMorgan Japanese (JFJ), Schroder Japan (SJG) – had been bobbling close to the year-high marks for some time now, but all saw their discounts set new highs for the year on Friday 27 September 2024.

Of the five, only SJG released results this week but a +21% NAV total return for the full year hardly cause for concern, more like celebration. The reason for the sector-wide discount doldrums have a political driver. After Japan’s markets closed on Friday, former defence minister, Shigeru Ishiba, narrowly defeated Economic Security Minister, Sanae Takaichi, in the Liberal Democratic Party’s leadership contest. That means Ishiba becomes Japan’s next prime minister.

With Ishiba considered to be on the hawkish side when it comes to monetary policy, expectations are that he will likely not stand in the way of further interest rate hikes as the Bank of Japan looks to normalise monetary policy after years of tackling deflation. Cue the election result causing the yen to gain more than 1% against the dollar and stock futures to sink, indicating a selloff in equities lies ahead when markets reopen on Monday. But with UK markets still open, the share prices of all five Japan-focused investment companies were always likely to come under pressure, and so it proved.

The top five

FundDiscountSectorCeiba Investments CBA-71.81%Property

Schroder Capital Global Innovation

INOV-57.50%Growth Capital

JPEL Private Equity JPEL-51.34%Private Equity

Atrato Onsite Energy ROOF-31.76%Renewables

Fidelity Japan FJV-19.53%Japan

The full list

FundDiscountSector

Schroder Capital Global Innovation

INOV57.50%Growth Capital

Fidelity Japan FJV19.53%JapanSchroder Japan SJG14.69%JapanBaillie Gifford Japan BGFD16.79%JapanCC Japan Income & Growth CCJI11.87%JapanJPMorgan Japanese JFJ14.50%Japan

JPEL Private Equity JPEL51.34%Private Equity

Ceiba Investments CBA71.81%Property

Atrato Onsite Energy ROOF31.76%Renewables