where incomes per head of population rise steadily and levels of consumption increase at an accelerating rate for a period of time. Exactly the same process took place in Taiwan and Korea 20 or 30 years ago and in Japan before that. The difference this time is the scale on which the transformation is happening. Never before has this kind of development happened in a country of over 1.3bn people.
(PRWeb UK) February 25, 2010
Fidelity International has announced details of the intention to launch Fidelity China Special Situations PLC (the “Company”), a new closed-ended investment company, which will make an application to list on the Official List of the UK Listing Authority and to be admitted to trading on the main market of the London Stock Exchange plc (“LSE”). The Company, which is targeting an initial capital raising of around £630 million, will invest in a diversified portfolio consisting primarily of securities issued by companies listed in China or Hong Kong and Chinese companies listed elsewhere.
Anthony Bolton , one of the most successful investors of his generation, will manage the portfolio using his contrarian approach to investing to achieve the objective of long-term growth. He will be supported by Fidelity’s well-resourced Asian investment team.
Shares in the Company will be issued at £1 and made available through a public offer for subscription in the UK and a placing in certain overseas jurisdictions. Fidelity China Special Situations PLC shares will be eligible for ISA investments and applications may be made via the Fidelity ISA for either or both of the current and next tax years.
Full details of the Offer and Placing will be included in the prospectus expected to be published by the Company on 26 February but investors can register interest now online at http://www.fidelity.co.uk to ensure they receive an information pack as soon as it becomes available.
26 February: Prospectus publication date; Public Offer opens; investors able to apply for shares
26 March: Closing date for paper applications for Fidelity ISA and SharePlan
5 April: Public Offer closes; Fidelity ISA online applications close
19 April: Admission to LSE and dealing commences in the new shares
Anthony Bolton , Manager of the Fidelity China Special Situations portfolio, commented, “I am very confident that there will be very many stock-picking opportunities in China in the years to come. I see many similarities with investing in Europe in the early part of my career. Then, my longer-term, research-led approach was considered unusual in a market more used to short-term trading but it proved to be successful. I think the same will be the case in China and I expect that my experience in Europe will be helpful as I see the composition of the market shifting from an emphasis on manufacturing and financials to include more service-oriented companies.”
“History shows that many developing economies go through acceleration in their growth once GDP per head reaches a critical level, phenomenon called the 'S' curve effect. The most interesting aspect of China’s development is its position on this curve. It is in the investment “sweet spot” where incomes per head of population rise steadily and levels of consumption increase at an accelerating rate for a period of time. Exactly the same process took place in Taiwan and Korea 20 or 30 years ago and in Japan before that. The difference this time is the scale on which the transformation is happening. Never before has this kind of development happened in a country of over 1.3bn people.”
“This development has led to some concerns being expressed recently about the inflationary outlook in China and whether an asset price bubble is beginning to develop. I think these worries are overstated. On inflation, the Chinese have a record of moving in a measured way to slow credit expansion and I do not expect them to act in the sudden, aggressive way that can unsettle investors. As for a bubble, I think it is much too soon to be talking in these terms. The Chinese market began its recent rise in November 2008 and, in my experience, bubbles take several years to develop, not a little over one.”
Anthony Bolton is best known for his stewardship of the Fidelity Special Situations Fund, which he managed from its launch in December 1979 until the end of 2007. Over this twenty-eight year period, the fund achieved an annualised return of 19.5% (compared to 13.5% for the FTSE All-Share Index). During his tenure, £10,000 invested in the fund at launch grew in value to £1,432,000.**
Fidelity opened its Hong Kong office in 1981 and set up a representative office in China in 2004, now located in Beijing. The company has more than 16 years’ experience of investing in China. While many of the company’s Asian and global equity funds have Chinese market exposure, the company has a team of over 40 investment professionals in Hong Kong, from where it currently manages in excess of US$30 billion in equities***.
*Subject to approval by the UK Listing Authority
** Source of performance: Morningstar as at 31.12.07. Basis: bid-bid with net income reinvested, with annual management charges and initial charge 3.5%. Annualised growth rates, total return, sector median performance and ranks – Data Source - ©  Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
*** Source: Fidelity International as at 31.12.2009
Notes to editors:
FIL Limited (“FIL”) and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. Reference to specific funds or sectors should not be construed as a recommendation to buy or sell these funds or sectors, but is included for the purposes of illustration only. Any opinions expressed are made at the time of writing and can be subject to change without notification.
This document is an ADVERTISEMENT and not a prospectus. It refers to a proposal under consideration but in respect of which no final decision has been taken and does not constitute or form part of any offer or solicitation to acquire any investment. Investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information contained in a prospectus that will be published if a final decision to proceed with the proposed listing is taken. Copies of the prospectus will, following publication (if it occurs), be available from Fidelity International, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
This announcement has been issued by Fidelity Investments International, which is authorised and regulated by the Financial Services Authority. FIL Investments International is registered in England No. 1448245 and has its registered office at Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent, TN11 9DZ.
This announcement does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the law or regulation of any such jurisdiction.
In the event that the proposed listing proceeds, investors should note that the value of the shares may go down as well as up so you may get back less than you invested. This announcement does not constitute a recommendation concerning the offer. Potential investors should consult a professional advisor as to the suitability of the offer.
For further information, please contact:
Cenkos Securities plc (UK book runner and UK listing sponsor)
Charlie Ricketts Will Rogers
Direct: 020 7397 1910 Direct: 020 7397 1920
Press office address: Fidelity International, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP