Fidelity China Special S... Investors - FCSS

Fidelity China Special S... Investors - FCSS

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Stock Name Stock Symbol Market Stock Type
Fidelity China Special Situations Plc FCSS London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-16.00 -4.13% 371.00 16:35:06
Open Price Low Price High Price Close Price Previous Close
389.50 371.50 390.50 371.00 387.00
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Top Investor Posts

jfinvestments: Personally , I don't see -6% discount to be a buy opportunity. Average is -9.6% over the last 12 months. Considering that once meant 2.20 per share for many months, this has hit it's short term peak I think. I like the trust and will buy again but closer to ten % discount would be an ideal price for me. Hopefully I'm wrong and it is straight back to 500p. That was clearly a medium term sell off target for many investors.
davidro77: Really? It appears to be in free fall and there will be a lot of investors looking to lock in some gains now the top is in. It is still way way up I am looking for a mini bounce to top slice here not buy more
cordwainer: (kinda off-topic) looking to at least take profits or sell half but fidelity log-in and dealing (including telephone dealing) is down. Unplanned, that is. I might switch, How is Interactive Investor these days ?
shieldbug: NAV where it was in May 2017. According to Dale Nicholls "Looking across valuations within the portfolio overall, we are back to levels last seen after the sharp A-share driven correction in 2015, which was an opportune entry point for investors."
masurenguy: The Shanghai Market has dropped by circa 67% from its high of around 6000 in November 2007 to around 2000 some 18 months later. It had rallied back up to 3000 by the time this fund was launched in mid 2010 and then it fell back to 2000 over the following 2 years where it has largely remained. However following the economic and social reforms announced last week it has jumped by 10% in a matter of days as a result of a number of strict controls being relaxed with the objective of enhancing consumer demand and domestic consumption. A Credit Suisse analyst went as far as describing these changes as being the "most comprehensive and ambitious reform plan in the history of the People's Republic" The FCSS shareprice has been one step ahead of this development having risen by 30% over the past 5 months, from the year low 80p on June 24th to the current 115p this morning. This has also exceeeded the 23% increase in NAV during the same period. Anthony Bolton was also quite bullish in his interim statement last week: "I believe there are two common mistakes investment commentators make when they consider the outlook for China: firstly, many paint an overly black or white picture about its future and, secondly, they make predictions for China based solely on their Western experience. China is a diverse, large and complex country and the likelihood that the economy will collapse in a Western style banking crisis any time soon, something that several international commentators predict, is extremely remote in my view. A particular worry focused on this year by the China `bears' is the rising level of debt in China relative to GDP. There are various definitions of total debt but this is generally thought to represent over 200% of GDP and the figure has risen significantly in the last five years. We need to watch closely how this progresses from here, but in a system where debt is financed internally not from overseas borrowings, it is very difficult to estimate at what level debt could become a problem. This could be at much higher levels than we see today. Regarding the stock market outlook, valuations have risen a little above their ten-year lows but they are still well below their long-term average. Although sentiment has recovered somewhat, investors, particularly on the mainland, remain cautious. Internationally, emerging markets and China in particular remain out of favour. Indeed the Chinese market has been one of the worst performing world markets over the last three years or so. I remain optimistic. I am still finding many attractive investment opportunities in Chinese shares and continue to think there is still good upside ahead. I am delighted that investors' patience has now started to be rewarded and I hope that this trend will continue during the last five months before I hand over the portfolio to Dale Nicholls and beyond." Anthony Bolton - 11 November 2013 I think there are a number of coalescing fundamental and technical factors to support the return of some strong growth in China next year and I believe that we could see the resumption of a bull market with an increase of up to 40% to take the market index back above 3000 by the end of next year. Consequently, having sold out in two traNches during September 2010 and January 2011, I have NOW bought back into FCSS @105p this morning.
topvest: Yes, it's not like he's Warren Buffet anyway. I think his investment approach is reasonably average, albeit probably just about second quartile. Let's face he is still underwater here which is rubbish in the time frame he has had! I think he will stay until he regains a reasonable profit otherwise his legacy as a good investor will be in tatters.
whizzy1: MONEY OBSERVER: Investment firm Fidelity has witnessed its 'busiest January for seven years' and says the Isa season - when investors rush to fill up their Isas before the end of the tax year - may have come early. Mark Till, head of Fidelity UK personal investing, comments: 'We've had a very busy January. All the money's been "risk on", so it's flowing into equity funds. It's more about new money coming into equity funds though, rather than investors all switching out of bond funds.' He adds: 'The Fidelity China Special Situations investment trust has also recorded its biggest January inflow since it launched.'
1066monkey: WhizzyDisagree. If the NAV rises above 100p so will the share price in all probability. Not like a share in a company where investors can easily disagree about valuation.
masurenguy: Could this come to Boltons aid ? Chinese Shares Surge on Hopes Based on Stimulus Plan Stock markets in mainland China roared ahead more than 4% during Friday trading, amid hopes that the Chinese authorities were revving up efforts to bolster stalling growth in the world's second-biggest economy, after that of the United States. The rally was set off by the announcement this week of what analysts said was essentially a new stimulus package worth more than $100bn: the accelerated approval by the country's top economic planning agency of dozens of large-scale state infrastructure projects designed to jump-start growth. On Wednesday and Thursday, Beijing policy makers announced approvals of 25 new subway lines and 13 new highway projects spanning thousands of kilometers. Together with several other large-scale projects related to airports, energy production and wastewater treatment plants, the total investment for all projects approved since April was 848bn renminbi, or $134bn, according to Zhiwei Zhang, the chief China economist at Nomura in Hong Kong. "The decision for the Chinese government to intensively announce these projects over the past two days signals a significant change in its policy stance from the incremental and reactive approach to a more decisive and proactive approach," Mr. Zhang said Friday in a research note. Investors seized on the news Friday, sending the Shanghai composite index to its biggest single-day jump in months. At one point, the index rose 4.5% to its highest level since mid-August, before giving up some of the gains to close 3.7% higher. The market in Shenzhen ended the day with a gain of 3.8%. Both indexes remain more than 15% below where they were 12 months ago, and the evidence of China's broad economic slowdown has resulted in a steep sell-down in domestic shares since May. At the same time, analysts pointed out that it was unclear whether the approvals in fact represented the pumping of new cash into the flagging construction sector or whether they were part of plans that had been previously announced. In either case, the announcements were read as clear signals that Beijing was intent on stimulating growth. "The China market is very sentiment-driven, very driven by what the government is doing," said Dariusz Kowalczyk, an economist at Crédit Agricole in Hong Kong. More...........
masurenguy: Bolton says sorry for China fund losses Fidelity China Special Situations raised £430 million from investors in April 2010, making it one of the largest investment trust launches in recent years. However, excitement at the return of Anthony Bolton from retirement to run a fund investing in the world's fastest growing economy was soon damped down as performance turned sour after a 15% gain in the first year. Today the trust reported that in the six months to 30 September its investment portfolio slumped 28.9%, worse than the 24.5% fall in its benchmark, the MSCI China index. Its share price fared worse in the summer crash, tumbling 31% in the period. The shares that investors subscribed for at 100p at launch now trade at 78.6p, up 0.55p today. Including the 0.25p per share final dividend paid earlier this year, that's a total loss to date of just over 21%. The MSCI China is down 13% over the same period. Bolton apologises 'I am sorry to report that the combination of the very difficult stock market background, the company's exposure to the more volatile medium and smaller capitalisation Chinese stocks and the company's gearing [level of borrowing] has produced some very poor performance figures,' Bolton said in his manager's report. He blamed the increasing number of commentators forecasting a 'hard landing' for China's economy, and said this negativity combined with fears over a property and credit bubble had punished China's stock market. However, he admitted his mistake in thinking China could buck world markets. 'Asian markets in general have fared less well than developed markets as investors have reduced risk and I have been wrong so far in my expectation that China's stockmarket could decouple from the West.' The investment veteran, famous for his former management of Fidelity Special Situations unit trust, described the last few weeks of the half-year period when global markets crashed on eurozone and recession fears as 'brutal' and 'as difficult a time to be running money as I can remember'. Markets to rally But he remains convinced that his focus on consumer and service stocks is the right long-term approach. 'The rise of the Chinese middle class is something all investors should have exposure to,' he told reporters on a conference call. In the statement Bolton described himself as an 'optimistic contrarian' and said the surge in negative investment sentiment had created investment opportunities. 'Everywhere risk is off. Markets normally move to prove the majority wrong. I believe such a strong market recovery likely over the next few months.' China: three issues Inflation and economy: Bolton said that although food inflation was volatile and difficult to predict, falls in global commodity prices should help lower China's inflation and prevent it overheating. He still believed its economy could grow by around 8% next year, but if the world went into a slowdown this would fall to between 5% and 6%. He said China was less reliant on exports to the rest of the world compared to other countries in Asia. 'The destiny of its economy is more in its own hands,' he said. Banks and bad debts: On fears of a credit bubble caused by unofficial bank lending and an explosion in bad debts, Bolton said it was a big problem, but not an immediate one, and predicted that the central government would step in and remove the bad debts from banks' balance sheets. Although some banks would suffer, he denied it was 'a major national problem that will have a big impact on the economy'. Property crash: Bolton has been worried about prospects for residential property and said house prices had started to fall and that the next 12-18 months would be difficult. However, without the substantial mortgage debt of the West and with 'good long-term supply/demand dynamics', Bolton said he was more optimistic for the longer term. Calling the cops Bolton's fund took a hit from the accounting scandals that plagued some of the China companies reversing into US-listed companies in order to gain a global stock market presence. Bolton admitted there had been two or three times the amount of corporate governance problems at such companies as he would have forecast. He revealed that Fidelity had hired five firms to help him with due diligence on companies in future. Elswhere his big positions include a 26.1% weighting in financial stocks, compared to 31.7% in the MSCI China. In line with his investment theme Bolton has 25.9% of the fund in consumer discretionary stocks, a big bet as these companies account for just 5.6% of the index. He is also massively underweight energy stocks, holding just 0.1% of the fund in the sector compared to its index weighting of 19.7%. The fund remains heavily exposed (40.1%) to smaller companies (defined as being valued at under £1 billion), although these account for just 2.1% of the MSCI China index. His biggest stock holding is China Unicom (7.2%) which Bolton said was the best placed of the country's three mobile phone companies to exploit Chinese growing appetite for smartphones and mobile data. Ping An Insurance (4.4%) was a play on his forecast in big growth for life insurance, while China Minsheng Banking Corp (2.7%) had the best franchise in lending to smaller and medium-sized companies. Citywire Verdict Bolton is clearly no index hugger which is fine as it's Bolton's active management skills that investors are paying with the trust's 1.5% annual management charge and a performance fee that could see Fidelity take 15% of any excess growth in the portfolio above 2% of the MSCI China index. Obviously the latter has not featured with its performance to date! Bolton sounds convincing when he says markets could bounce back and that negative sentiment to China may be over done. However, investors may want to know why he left the trust exposed with a higher level of gearing (8% according to Numis Securities) than other China trusts which either are ungeared or have lower levels of borrowing of 1-3%. The ability of investment trusts to gear up is one of their great strengths. However, it raises risk levels. A geared trust will rise faster than a rising market but conversely will fall further when markets are on a downward path. This is a trust that is inherently high risk. It is not for the faint hearted or the short-term investor. Bolton is a fantastic manager but it is nonetheless a shame he could not have done a bit more to protect investors from the storm that others saw coming.
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