Quarterly Report • Jan 31, 2013
Quarterly Report
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For the 6 months ended 31 January 2013
| Investment Objective and | |
|---|---|
| Performance Summary | 1 |
| Summary of Results | 2 |
| Half-Yearly Report | 3 |
| Directors' Responsibility Statement | 6 |
| Twenty Largest Investments | 7 |
| Financial Statements | 10 |
| Investor Information | 20 |
| Directory | 21 |
| Glossary of Terms | 22 |
| Warning to Shareholders – Share Fraud Warning |
Inside Back Cover |
The investment objective of the Company is to achieve long term capital growth through investment principally in the stockmarkets of the Asian Region (excluding Japan)
| Six months to 31 January 2013 |
|
|---|---|
| Net Asset Value ("NAV") – undiluted | +16.1 |
| Net Asset Value ("NAV") – diluted | +13.5 |
| Ordinary Share Price | +12.6 |
| MSCI All Countries (Combined) Far East ex Japan Index (net) – in UK sterling terms |
+12.3 |
| 01/02/12 to 31/01/13 |
01/02/11 to 31/01/12 |
01/02/10 to 31/01/11 |
01/02/09 to 31/01/10 |
01/02/08 to 31/01/09 |
|
|---|---|---|---|---|---|
| NAV – undiluted | +10.0 | -9.8 | +33.5 | +72.7 | -31.6 |
| NAV – diluted | +8.5 | -8.4 | +29.9 | +72.7 | -31.6 |
| Ordinary share price | +4.6 | -7.7 | +30.3 | +68.3 | -28.5 |
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
| 31 January 2013 |
31 July 2012 |
% change | |
|---|---|---|---|
| Assets | |||
| Total portfolio exposure1 | £136.0m | £123.8m | +9.9 |
| Shareholders' funds | £129.2m | £117.1m | +10.3 |
| NAV per ordinary share – undiluted | 225.69p | 195.40p | +15.5 |
| NAV per ordinary share – diluted2 | 219.91p | 194.70p | +12.9 |
| Gearing3 | 5.3% | 5.7% | |
| Stockmarket data | |||
| Ordinary share price at period end | 197.13p | 176.00p | +12.0 |
| Period high | 198.25p | 207.00p | |
| Period low | 171.25p | 161.00p | |
| Discount to NAV at period end – undiluted | 12.7% | 9.9% | |
| Period high | 12.7% | 13.6% | |
| Period low | 8.9% | 2.6% | |
| Discount to NAV at period end – diluted | 10.4% | 9.6% | |
| Subscription share price at period end | 11.00p | 6.75p | |
| Period high | 14.00p | 27.50p | |
| Period low | 4.52p | 5.75p | |
| Results for the six months to 31 January (undiluted) | |||
| – see pages 10 and 11 | 2013 | 2012 | |
| Revenue return per ordinary share | 0.25p | 0.94p | |
| Capital return/(loss) per ordinary share | 29.77p | (23.64p) | |
| Total return/(loss) per ordinary share | 30.02p | (22.70p) | |
| Total returns (includes reinvested income) for | |||
| the six months to 31 January | 2013 | 2012 | |
| NAV per ordinary share – undiluted | +16.1% | –9.6% | |
| Ordinary share price | +12.6% | –5.9% | |
| MSCI All Countries (Combined) Far East Free ex | |||
| Japan Index (net)4 | +12.3% | –6.4% |
1 The total exposure of the investment portfolio, including exposure to the investments underlying the long Contracts for Diff erence ("CFDs")
2 The diluted NAV per ordinary share is included since the NAV per ordinary share is greater than the 191 pence exercise price of the subscription shares. Hence, if all the subscription shares had been converted at the period end, the NAV per ordinary share in issue would have been diluted
3 Total portfolio exposure in excess of shareholders' funds
4 In UK sterling terms
Sources: Fidelity and Datastream Past performance is not a guide to future returns
Over the six months to 31 January 2013, the net asset value of Fidelity Asian Values PLC registered encouraging growth and outperformed the Benchmark Index. The net asset value per share increased by 16.1%, compared with an increase of 12.3% for the MSCI All Countries (Combined) Far East Free ex Japan Index. The increase in the net asset value per share was not fully refl ected in the ordinary share price which rose by 12.0%. As a result the discount widened from 9.9% to 12.7% over the period. (All fi gures in UK sterling terms and on a total return basis).
Far East ex Japan equities recovered from early losses in 2012, bolstered particularly by positive economic news-fl ow in the second half of the year. Concerns about a deepening of the sovereign debt crisis in the Eurozone eased; the uncertainty surrounding US elections ended; there was rising evidence of an up-turn in the Chinese economic cycle, whilst expectations that a change of guard in China would result in growth-oriented policy measures also proved supportive. The US Federal
Sources: Fidelity and Datastream
Reserve initiated another round of quantitative easing which further boosted investor confi dence. From a sector perspective, the fi nancial and energy sectors outperformed the overall Index. Banks, insurance providers and real estate fi rms benefi ted from an improvement in growth prospects, given broadly strong balance sheets, and attractive earnings. Meanwhile, utilities fi rms were bolstered by their defensive positioning and attractive yields which proved a safeguard against volatility.
The robust turnaround in the Company's performance was primarily driven by a high conviction bias towards the information technology sector. The largest driver of outperformance in the period was the overweight position in SouFun Holdings, which is the leading real estate internet portal and home furnishing and improvement website in China. The share price was driven by robust earnings growth as slowing property sales in China attracted a larger number of small and medium sized developers to its marketing and listings services, whilst its cards business, which off ers a discount to subscribers, also made strong progress. An overweight stance in personal computer, notebook and smartphone producer Lenovo Group also added value in light of better than expected earnings growth and strong growth prospects given its geographical diversifi cation strategy. Meanwhile, an underweight allocation to the materials sector enhanced both relative and absolute performance. An overweight position in Nine Dragons Paper enhanced returns as interest costs declined and signs of a recovery in demand bolstered investor confi dence. On the other hand, not holding a stake in steel producer POSCO and petrochemicals fi rm LG Chem bolstered relative performance. Within fi nancials, a position in Hong Kong based Wharf Holdings also performed well on the back of positive earnings growth and was later driven by optimism about new development projects in China. A stake in fl oor care and power
tools manufacturer Techtronic Industries was also a leading contributor to overall gains.
Conversely, the stake in Li & Fung disappointed given an uncertain outlook for growth. A position in South Korea-based automobile producer KIA Motors retreated in view of productivity losses, disappointing quarterly results and uncertainty surrounding the overstatement of their cars' fuel effi ciency. Elsewhere, selected IT holdings such as online games producer NCsoft and China-based internet search provider Baidu disappointed. Whilst the former declined following disappointing quarterly results, share prices in the latter were impacted by prospects of rising competitive pressure, due to concerns surrounding US listed Chinese companies.
The Manager signifi cantly decreased the allocation to the consumer discretionary sector by selling the stake in Li & Fung as its growth strategy is unclear and valuations were not attractive. Additionally, the stake in KIA Motors was decreased, although the overweight stance in the fi rm is retained. A new holding was introduced in educational services provider New Oriental Education & Technology Group at attractive valuations as it seeks to cut costs and focus on increasing margins. The Manager also re-introduced the position in Macau-based casino operator SJM Holdings to benefi t from a valuations upside from its expansion strategy and attractive yields. Meanwhile, the exposure to consumer staples was increased by introducing a position in Hengan International and cosmetics producer Korea Kolmar as both these companies benefi t from changing consumer preferences. Exposure to both telecommunications and utilities segments was decreased due to limited valuations upside. The Manager continues to retain an overweight stance in the IT sector whilst retaining an underweight stance in fi nancials. With respect to the latter, the Company continues to maintain a
substantial overweight in real estate fi rms such as Wharf Holdings and Sun Hung Kai Properties.
Although growth projections for the region were adjusted downwards, robust domestic demand and better than estimated growth in the US are likely to underpin a faster than expected economic expansion in Asia particularly when compared to the rest of the world. Whilst questions remain on the health of the US and the fragile economic conditions in Europe, the outlook for the Asian region is largely positive for 2013. Growth is likely to remain attractive, with infl ation under control and debt at low levels. Most Asian economies have the ability to use counter-cyclical fi scal and monetary policies to support their economies. Balance sheets and cashfl ows among Asian corporations remain healthy, whilst valuations are attractive. The Manager's strategy remains focussed towards better quality businesses and it continues to favour companies with strong fundamentals and attractive growth strategies and yields.
At the General Meeting held on 28 November 2012, shareholders approved a change to the Company's investment policy to permit the use of Contracts For Diff erence ("CFDs"). The ability to use CFDs will increase gearing fl exibility.
The costs of using CFDs in the manner proposed by the Board and the Manager are currently lower than the costs involved in traditional gearing. Accordingly the Company repaid and cancelled the US\$15,000,000 loan facility with Scotiabank Europe PLC on 28 February 2013. The Company has now implemented its CFD investment programme. While gearing through CFDs is currently cheaper than using loans, a temporary increase in turnover will be seen in the next Annual Report as a result of the transition.
Under the investment policy the level of borrowing, whether through bank lending or CFDs, will not exceed 30% of the value of net assets at the time it was incurred. At 31 January 2013 the level of gearing was 5.3%.
During the six months to 31 January 2013, 2,703,000 ordinary shares were repurchased for cancellation. Following the end of the reporting period, a further 400,000 ordinary shares were repurchased for cancellation.
The rights attaching to a total of 11,922 subscription shares were exercised during the six months to 31 January 2013. Since the end of the reporting period, a further 86,986 subscription shares have been exercised and the total number of subscription shares remaining in issue as at the date of this report is 11,355,524. The fi nal date for exercising the rights attached to the subscription shares is 31 May 2013. The exercise price of the rights attaching to the subscription shares is 191 pence per subscription share and as at 25 March 2013 the ordinary share price of the Company was 201.5 pence per share.
After 31 May 2013, the Company will appoint a trustee to determine the net proceeds from the sale of ordinary shares arising on the exercise of the rights attaching to the subscription shares that have not been exercised after deduction of costs, expenses and fees. If these net proceeds are lower than the cost of exercising the rights attached to the said subscription shares, then the subscription share rights will lapse. If the net proceeds are higher than the cost of exercising the rights attached to the subscription shares then, within fourteen days of 31 May 2013, the Company will either:
and the resulting net proceeds in excess of the exercise price will be paid to the holders of the outstanding subscription shares unless the amount arising to a subscription shareholder is less than £5.
The Board believes that the principal risks and uncertainties faced by the Company continue to fall in the following categories: market risk; performance risk; loan risk; gearing risk; currency risk; fi nancial and fi nancial instrument risks; income-dividend risk; share price, NAV and discount volatility risks; counterparty risk; and governance, operational, fi nancial, compliance and administration. Information on each of these is given in the Business Review section of the Annual Report for the year ended 31 July 2012.
The Board receives regular reports from the Manager and the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the fi nancial statements as outlined in the Annual Report for the year ended 31 July 2012.
FIL Investments International 26 March 2013
The Directors confi rm to the best of their knowledge that:
The Half-Yearly fi nancial report has not been audited or reviewed by the Company's Independent Auditor.
The Half-Yearly fi nancial report was approved by the Board on 26 March 2013 and the above responsibility statement was signed on its behalf by Hugh Bolland, Chairman.
| Country | Investment | Exposure £'000 |
Fair Value1 £'000 |
Total Exposure2 % |
|---|---|---|---|---|
| CHINA | Tencent Holdings Provides internet, mobile and telecommunications, value-added services. It has an instant messaging community and it |
|||
| provides messaging services. Petrochina Produces and sells oil and gas related products. |
5,743 4,164 |
5,743 4,164 |
4.2 3.1 |
|
| Lenovo Group Develops, manufactures and markets technology products such as personal computers, notebooks and smart phones. |
3,717 | 3,717 | 2.7 | |
| China Overseas Land & Investment An investment holding company engaged in property development and investment. |
3,350 | 3,350 | 2.5 | |
| SouFun Holdings Operates a real estate Internet portal and a home furnishing and improvement website. |
3,212 | 3,212 | 2.4 | |
| Nine Dragons Paper Holdings Manufactures and sells packaging paper, recycled printing and writing paper, pulp and high value specialty paper products |
3,106 | 3,106 | 2.3 | |
| HONG KONG | Wharf Holdings3 The holding company of a group with interests in property, communications, media, entertainment and logistics, primarily operating in Hong Kong. |
6,290 | 4,883 | 4.6 |
| Sun Hung Kai Properties The core business of the company is the development of property for sale and investment. |
4,877 | 4,877 | 3.6 | |
| Techtronic Industries Manufactures and sells electrical and electronic products. |
4,863 | 4,863 | 3.6 |
Fair value represents the carrying value in the Balance Sheet on page 14
% of the total exposure of the investment portfolio, including exposure to the investments underlying the long CFDs
3 Investment is via a long CFD
| Country | Investment | Exposure £'000 |
Fair Value1 £'000 |
Total Exposure2 % |
|---|---|---|---|---|
| AIA Group An investment holding company providing products and services to individuals and businesses for their insurance, protection, savings, investment and retirement needs. |
4,769 | 4,769 | 3.5 | |
| Samsonite International Designs, manufactures and distributes luggage and other travel bags. |
3,698 | 3,698 | 2.7 | |
| SJM Holdings Off ers amusement and recreation services. It operates casinos, hotels and other tourism related services in Macau. |
3,305 | 3,305 | 2.4 | |
| SOUTH KOREA | Samsung Electronics Provides communication products. It operates through fi ve business divisions: communication, semiconductor, digital media, liquid crystal display ("LCD") and home appliances. |
10,517 | 10,517 | 7.7 |
| LG Household & Healthcare Manufactures household goods, cosmetics and beverages. It sells beauty care, dental care, laundry and cleaning products through its household division, skin care and make-up products through its cosmetics division, and juice, tea, coff ee and bottled water through its beverage division. |
5,332 | 5,332 | 3.9 | |
| LG Uplus Provides wireless telecommunication services. |
3,992 | 3,992 | 2.9 | |
| Hotel Shilla Operates hotels and duty free shops. |
3,089 | 3,089 | 2.3 | |
| Daelim Industrial A multinational operating engineering, construction and petrochemical businesses. |
3,086 | 3,086 | 2.3 |
1 Fair value represents the carrying value in the Balance Sheet on page 14
2 % of the total exposure of the investment portfolio, including exposure to the investments underlying the long CFDs
3 Investment is via a long CFD
| Country | Investment | Exposure £'000 |
Fair Value1 £'000 |
Total Exposure2 % |
|---|---|---|---|---|
| TAIWAN | Taiwan Semiconductor Manufacturing Researches, develops, manufactures and distributes integrated circuit related products. Its businesses include wafer manufacture, mask production, wafer testing and packaging components. |
7,115 | 7,115 | 5.2 |
| Asustek Computer Manufactures and distributes computers, communication products and consumer electronics. |
3,550 | 3,550 | 2.6 | |
| Hon Hai Precision Produces and sells electronic products which are applied in computer, communication and consumer electronic goods. |
3,218 | 3,218 | 2.4 | |
| Twenty largest investments | 90,993 | 89,586 | 66.9 | |
| Other investments | 45,027 | 45,027 | 33.1 | |
| Total portfolio (including long CFDs) | 136,020 | 134,613 | 100.0 |
Fair value represents the carrying value in the Balance Sheet on page 14
% of the total exposure of the investment portfolio, including exposure to the investments underlying the long CFDs
3 Investment is via a long CFD
| for the six months ended 31.01.13 unaudited |
||||
|---|---|---|---|---|
| Notes | revenue £'000 |
capital £'000 |
total £'000 |
|
| Gains/(losses) on investments designated at fair value through profi t or loss |
– | 17,437 | 17,437 | |
| Losses on derivative instruments held at fair value through profi t or loss |
– | (32) | (32) | |
| Income | 2 | 1,310 | – | 1,310 |
| Investment management fee | (674) | – | (674) | |
| Other expenses | (299) | – | (299) | |
| Exchange (losses)/gains on other net assets | (9) | (58) | (67) | |
| Exchange gains/(losses) on loans | – | 102 | 102 | |
| Net return/(loss) before fi nance costs and taxation |
328 | 17,449 | 17,777 | |
| Finance costs | (84) | – | (84) | |
| Net return/(loss) on ordinary activities before taxation |
244 | 17,449 | 17,693 | |
| Taxation on return/(loss) on ordinary activities | 3 | (99) | – | (99) |
| Net return/(loss) on ordinary activities after taxation for the period |
145 | 17,449 | 17,594 | |
| Return/(loss) per ordinary share | ||||
| Undiluted | 4 | 0.25p | 29.77p | 30.02p |
A Statement of Total Recognised Gains and Losses has not been prepared as there are no gains and losses other than those reported in this Income Statement.
The total column of the Income Statement is the profi t and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued in the period.
These fi nancial statements have been prepared in accordance with the Association of Investment Companies ("AIC") Statement of Recommended Practice ("SORP") issued in January 2009.
| for the year ended 31.07.12 |
for the six months ended 31.01.12 |
|||||
|---|---|---|---|---|---|---|
| audited | unaudited | |||||
| revenue | capital | total | revenue | capital | total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| – | (21,037) | (21,037) | – | (14,294) | (14,294) | |
| – | – | – | – | – | – | |
| 2,999 | – | 2,999 | 1,669 | – | 1,669 | |
| (1,267) | – | (1,267) | (608) | – | (608) | |
| (515) | – | (515) | (257) | – | (257) | |
| (10) | 217 | 207 | 1 | 213 | 214 | |
| – | (447) | (447) | – | (406) | (406) | |
| 1,207 | (21,267) | (20,060) | 805 | (14,487) | (13,682) | |
| (204) | – | (204) | (101) | – | (101) | |
| 1,003 | (21,267) | (20,264) | 704 | (14,487) | (13,783) | |
| (123) | – | (123) | (129) | – | (129) | |
| 880 | (21,267) | (20,387) | 575 | (14,487) | (13,912) | |
| 1.45p | (34.99p) | (33.54p) | 0.94p | (23.64p) | (22.70p) |
| share capital |
||
|---|---|---|
| Opening shareholders' funds: 1 August 2011 | Notes | £'000 15,408 |
| Exercise of rights attached to subscription shares and conversion into ordinary shares |
– | |
| Issue of ordinary shares on exercise of rights attached to subscription shares |
7 | 6 |
| Repurchase of ordinary shares | 7 | (199) |
| Net (loss)/return on ordinary activities after taxation for the period | – | |
| Dividend paid to shareholders | 5 | – |
| Closing shareholders' funds: 31 January 2012 | 15,215 | |
| Opening shareholders' funds: 1 August 2011 | 15,408 | |
| Exercise of rights attached to subscription shares and conversion into ordinary shares |
– | |
| Issue of ordinary shares on exercise of rights attached to subscription shares |
7 | 12 |
| Repurchase of ordinary shares | 7 | (439) |
| Net (loss)/return on ordinary activities after taxation for the year | – | |
| Dividend paid to shareholders | 5 | – |
| Closing shareholders' funds: 31 July 2012 | 14,981 | |
| Exercise of rights attached to subscription shares and conversion into ordinary shares |
– | |
| Issue of ordinary shares on exercise of rights attached to subscription shares |
7 | 3 |
| Repurchase of ordinary shares | 7 | (676) |
| Net return on ordinary activities after taxation for the period | – | |
| Dividend paid to shareholders | 5 | – |
| Closing shareholders' funds: 31 January 2013 | 14,308 |
| other non | capital | share | ||||
|---|---|---|---|---|---|---|
| total | revenue | capital | other | distributable | redemption | premium |
| equity | reserve | reserve | reserve | reserve | reserve | account |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| 141,257 | 1,060 | 95,259 | 19,238 | 7,367 | 1,785 | 1,140 |
| – | – | – | – | – | – | – |
| 47 | – | – | – | – | – | 41 |
| (1,424) | – | (1,424) | – | – | 199 | – |
| (13,912) | 575 | (14,487) | – | – | – | – |
| (614) | (614) | – | – | – | – | – |
| 125,354 | 1,021 | 79,348 | 19,238 | 7,367 | 1,984 | 1,181 |
| 141,257 | 1,060 | 95,259 | 19,238 | 7,367 | 1,785 | 1,140 |
| – | – | – | – | – | – | – |
| 90 | – | – | – | – | – | 78 |
| (3,261) | – | – | (3,261) | – | 439 | – |
| (20,387) | 880 | (21,267) | – | – | – | – |
| (615) | (615) | – | – | – | – | – |
| 117,084 | 1,325 | 73,992 | 15,977 | 7,367 | 2,224 | 1,218 |
| – | – | – | – | – | – | – |
| 23 | – | – | – | – | – | 20 |
| (4,946) | – | (4,946) | 676 | – | ||
| 17,594 | 145 | 17,449 | – | – | – | – |
| (596) | (596) | – | – | – | – | – |
| 129,159 | 874 | 91,441 | 11,031 | 7,367 | 2,900 | 1,238 |
| 31.01.13 | 31.07.12 | 31.01.12 | ||
|---|---|---|---|---|
| unaudited | audited | unaudited | ||
| Fixed assets | Notes | £'000 | £'000 | £'000 |
| Investments designated at fair value through | ||||
| profi t or loss | 134,645 | 123,758 | 132,746 | |
| Current assets | ||||
| Debtors | 3,408 | 206 | 3,191 | |
| Cash at bank | 2,761 | 3,769 | 2,245 | |
| 6,169 | 3,975 | 5,436 | ||
| Creditors | ||||
| Derivative liabilities held at fair value through | ||||
| profi t or loss | (32) | – | – | |
| Bank Loans | 6 | (9,461) | (9,563) | (9,522) |
| Other creditors | (2,162) | (1,086) | (3,306) | |
| (11,655) | (10,649) | (12,828) | ||
| Net current liabilities | (5,486) | (6,674) | (7,392) | |
| Total net assets | 129,159 | 117,084 | 125,354 | |
| Capital and reserves | ||||
| Share capital | 7 | 14,308 | 14,981 | 15,215 |
| Share premium account | 1,238 | 1,218 | 1,181 | |
| Capital redemption reserve | 2,900 | 2,224 | 1,984 | |
| Other non-distributable reserve | 7,367 | 7,367 | 7,367 | |
| Other reserve | 11,031 | 15,977 | 19,238 | |
| Capital reserve | 91,441 | 73,992 | 79,348 | |
| Revenue reserve | 874 | 1,325 | 1,021 | |
| Total equity shareholders' funds | 129,159 | 117,084 | 125,354 | |
| Net asset value per ordinary share | ||||
| Undiluted | 8 | 225.69p | 195.40p | 205.98p |
| Diluted | 8 | 219.91p | 194.70p | 203.61p |
| 31.01.13 | 31.07.12 | 31.01.12 | |
|---|---|---|---|
| unaudited | audited | unaudited | |
| £'000 | £'000 | £'000 | |
| Operating activities | |||
| Investment income received | 894 | 3,032 | 1,494 |
| Investment management fee paid | (332) | (1,663) | (999) |
| Directors' fees paid | (67) | (123) | (83) |
| Other cash payments | (214) | (594) | (184) |
| Net cash infl ow from operating activities | 281 | 652 | 228 |
| Finance costs | |||
| Interest paid on long CFDs and bank loans | (87) | (219) | (95) |
| Net cash outfl ow from fi nance costs | (87) | (219) | (95) |
| Financial investments | |||
| Purchase of investments | (50,986) | (108,698) | (33,964) |
| Disposal of investments | 55,598 | 110,939 | 33,416 |
| Net cash infl ow/(outfl ow) from fi nancial investments | 4,612 | 2,241 | (548) |
| Dividend paid to shareholders | (596) | (615) | (614) |
| Net cash infl ow/(outfl ow) before fi nancing | 4,210 | 2,059 | (1,029) |
| Financing | |||
| Repurchase of ordinary shares | (5,172) | (3,035) | (1,424) |
| Exercise of rights attached to subscription shares | 12 | 105 | 62 |
| Net cash outfl ow from fi nancing | (5,160) | (2,930) | (1,362) |
| Decrease in cash | (950) | (871) | (2,391) |
The half-yearly financial statements have been prepared on the basis of the accounting policies set out in the Company's annual report and financial statements for the year ended 31 July 2012.
| 31.01.13 | 31.07.12 | 31.01.12 | ||
|---|---|---|---|---|
| unaudited | audited | unaudited | ||
| £'000 | £'000 | £'000 | ||
| 2 | INCOME | |||
| Income from investments designated at fair value through profi t or loss |
||||
| Overseas dividends | 1,084 | 2,784 | 1,454 | |
| Overseas scrip dividends | 226 | 215 | 215 | |
| Total Income | 1,310 | 2,999 | 1,669 | |
| 31.01.13 | 31.07.12 | 31.01.12 | ||
| unaudited | audited | unaudited | ||
| £'000 | £'000 | £'000 | ||
| 3 | TAXATION ON RETURN/(LOSS) ON ORDINARY ACTIVITIES | |||
| Overseas taxation suff ered | ||||
| Revenue | 99 | 123 | 129 | |
| Capital | – | – | – | |
| Total | 99 | 123 | 129 | |
| 31.01.13 unaudited |
31.07.12 audited |
31.01.12 unaudited |
|
|---|---|---|---|
| RETURN/(LOSS) PER ORDINARY SHARE | |||
| Undiluted | |||
| Revenue | 0.25p | 1.45p | 0.94p |
| Capital | 29.77p | (34.99p) | (23.64p) |
| Total | 30.02p | (33.54p) | (22.70p) |
The undiluted returns/(losses) per ordinary share are based on net returns/(losses) on ordinary activities after taxation and the weighted average number of ordinary shares in issue. The returns for the six months ended 31 January 2013 were: revenue return £145,000 (31.07.12: £880,000; 31.01.12: £575,000), capital return £17,449,000 (31.07.12: loss £21,267,000; 31.01.12: loss £14,487,000) and total return £17,594,000 (31.07.12: loss £20,387,000; 31.01.12: loss £13,912,000). The undiluted weighted average number of ordinary shares in issue for the six months ended 31 January 2013 was 58,605,547 (31.07.12: 60,772,836; 31.01.12: 61,279,714).
There was no dilution in the six months ended 31 January 2013 (31.07.12: none; 31.01.12: none) because the average market price of the ordinary shares during the periods was below the 191 pence per share exercise price of the rights attaching to the subscription shares.
No dividend has been declared in respect of the current period. The dividend payment of £596,000 shown in the Reconciliation of Movements in Shareholders' Funds for the six months ended 31 January 2013, is the final dividend of one penny per ordinary share paid for the year ended 31 July 2012, that was paid on 6 December 2012. The dividend payment of £615,000 shown in the Reconciliation of Movements in Shareholders' Funds for the year ended 31 July 2012 (six months ended 31 January 2012: £614,000), is the final dividend of one penny per ordinary share paid for the year ended 31 July 2011, that was paid on 8 December 2011.
The Company entered into a two year revolving credit facility with Scotiabank Europe PLC for an amount of up to US\$15,000,000 on 28 February 2012 and the full amount was drawn down for the 3 months to 29 May 2012, at an interest rate of 1.87%. This was further rolled over for the 3 months to 29 August 2012 at 1.84%, for the 3 months to 29 November 2012 at 1.80% and for the 3 months ending 28 February 2013 at an interest rate of 1.69%.
Since the reporting period end, the Company has repaid the loan and cancelled the US\$15,000,000 credit facility on 28 February 2013.
| 31.01.13 unaudited shares |
31.07.12 audited shares |
31.01.12 unaudited shares |
|
|---|---|---|---|
| 7 SHARE CAPITAL |
|||
| Issued, allotted and fully paid: | |||
| Ordinary shares of 25 pence each | |||
| Beginning of the period Issue of ordinary shares on conversion of |
59,918,781 | 61,628,970 | 61,628,970 |
| subscription shares | 11,922 | 47,311 | 24,771 |
| Repurchase of ordinary shares | (2,703,000) | (1,757,500) | (797,500) |
| End of the period | 57,227,703 | 59,918,781 | 60,856,241 |
| Subscription shares of 0.01 pence each1 | |||
| Beginning of the period Exercise of rights attaching to subscription |
11,454,432 | 11,501,743 | 11,501,743 |
| shares and conversion into ordinary shares | (11,922) | (47,311) | (24,771) |
| End of the period | 11,442,510 | 11,454,432 | 11,476,972 |
| 31.01.13 unaudited |
31.07.12 audited |
31.01.12 unaudited |
|
| £'000 | £'000 | £'000 | |
| Issued, allotted and fully paid: | |||
| Ordinary shares of 25 pence each | |||
| Beginning of the period Issue of ordinary shares on conversion of |
14,980 | 15,407 | 15,407 |
| subscription shares | 3 | 12 | 6 |
| Repurchase of ordinary shares | (676) | (439) | (199) |
| End of the period | 14,307 | 14,980 | 15,214 |
| Subscription shares of 0.01 pence each1 | |||
| Beginning of the period Exercise of rights attaching to subscription |
1 | 1 | 1 |
| shares and conversion into ordinary shares | – | – | – |
| End of the period | 1 | 1 | 1 |
| Total share capital | 14,308 | 14,981 | 15,215 |
The terms of the rights attaching to the subscription shares are detailed in the Half-Yearly Report on page 5
The undiluted net asset value per ordinary share is based on net assets of £129,159,000 (31.07.12: £117,084,000; 31.01.12: £125,354,000) and on 57,227,703 (31.07.12: 59,918,781; 31.01.12: 60,856,241) ordinary shares, being the number of ordinary shares in issue at the period end.
The diluted net asset value per ordinary share has been calculated on the basis that the outstanding subscription shares of 11,442,510 at 31 January 2013 (31.07.12: 11,454,432; 31.01.12: 11,476,972) were exercised on that date. This basis of calculation is in accordance with guidelines laid down by the AIC.
Undiluted and diluted net asset values per ordinary share are provided to the London Stock Exchange on a daily basis.
Investment transaction costs are incurred in the acquisition and disposal of investments. These are included in the gains/(losses) on investments designated at fair value through profit or loss in the capital column of the Income Statement and are summarised below:
| 31.01.13 | 31.07.12 | 31.01.12 | |
|---|---|---|---|
| unaudited | audited | unaudited | |
| £'000 | £'000 | £'000 | |
| Purchases | 103 | 204 | 61 |
| Sales | 193 | 338 | 103 |
| 296 | 542 | 164 | |
The results for the six months to 31 January 2013 and 31 January 2012, which are unaudited, constitute non-statutory accounts within the meaning of Section 435 of the Companies Act 2006. The fi gures and fi nancial information for the year ended 31 July 2012 are extracted from the latest published fi nancial statements. These fi nancial statements, on which the Independent Auditor gave an unqualifi ed report, have been delivered to the Registrar of Companies.
Private investors call free on: 0800 41 41 10 9am to 6pm, Monday to Saturday.
Financial advisers call free on: 0800 41 41 81 8am to 6pm, Monday to Friday www.fi delity.co.uk/its
Existing investors who have a specifi c query regarding their holding or need to provide updated information, for example a change of address, should contact the appropriate administrator:
Capita Registrars, Registrars to Fidelity Asian Values PLC, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. Telephone: 0871 664 0300 (calls cost 10p per minute plus network extras) 8.30am to 5.30pm, Monday to Friday. Email: [email protected]
Details of individual shareholdings and other information can also be obtained from the Registrar's website: www:capitaregistrars.com
Fidelity Investment Trust Share Plan, PO Box 24035, 12 Blenheim Place, Edinburgh EH7 9DD. Telephone: 0845 358 1107 (calls cost 3.95p per minute from a BT landline dependent on the tariff . Other telephone service providers' costs may vary.)
Fidelity, using the freephone numbers given, or by writing to: UK Customer Service, Worldwide Investment, Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent, TN11 9DZ www.fi delity.co.uk/its
General enquiries should be made to Fidelity, the Investment Manager and Secretary, at the Company's registered offi ce: FIL Investments International, Investment Trusts, Beech Gate, Millfi eld Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP. Telephone: 01732 361144 Fax: 01737 836892 http://www.fi delity.co.uk/its
| 31 January | – Half-Yearly period end |
|---|---|
| 26 March | – Announcement of Half-Yearly |
| results to 31 January | |
| April | – Posting of Half-Yearly report |
| 31 July | – Financial year end |
| October | – Publication of Annual Report |
| November | – Annual General Meeting |
Hugh Bolland (Chairman) William Knight (Senior Independent Director) Kate Bolsover (Audit Committee Chairman) Kathryn Matthews Philip Smiley
FIL Investments International Beech Gate Millfi eld Lane Lower Kingswood Tadworth Surrey KT20 6RP
Canaccord Genuity Ltd 88 Wood Street London EC2V 7QR
Grant Thornton UK LLP Chartered Accountants and Registered Auditor 30 Finsbury Square London EC2P 2YU
JPMorgan Chase Bank (London Branch) 125 London Wall London EC2Y 5AJ
Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
Slaughter and May One Bunhill Row London EC1Y 8YY
Speechly Bircham LLP 6 New Street Square London EC4A 3LX
MSCI All Countries (Combined) Far East Free ex Japan Index (net)
A Contract For Diff erence is a derivative. It is a contract between the Company and a third party at the end of which the parties exchange the diff erence between the opening price and the closing price of an underlying asset of the specifi ed fi nancial instrument. It does not involve the Company buying or selling the underlying asset, only agreeing to receive or pay the movement in its share price. A Contract For Diff erence allows the Company to gain access to the movement in the share price by depositing a small amount of cash known as margin. The Company may reason that the asset price will rise, by buying ("long" position) or fall by selling ("short" position). If the Company trades long, dividends are received and interest is paid. If the Company trades short, dividends are paid and interest is received. The Company only intends to use long Contracts For Diff erence
Financial instruments (such as futures, options and Contracts For Diff erence) whose value is derived from the value of an underlying asset
If the share price of the Company is lower than the net asset value per share, the Company's shares are said to be trading at a discount. The discount is shown as a percentage of the net asset value. The opposite of a discount is a premium. It is more common for an investment trust to trade at a discount than a premium
The fair value is the best estimate of the value of the investments, including derivatives, at a point in time and this is measured as:
Gearing describes the level of a company's leverage and is usually expressed as a percentage. It can be obtained through the use of bank loans, bank overdrafts or Contracts For Diff erence in order to increase a company's exposure to stocks. If assets rise in value, gearing magnifi es the return to shareholders. Correspondingly, if the assets fall in value, gearing magnifi es the fall. Gearing refl ects the amount of leverage the Company uses to invest in the market. Contracts For Diff erence are used as a way of gaining exposure to the price movements of shares without buying the underlying shares directly.
In a simple example, if a company has £100 million of net assets and £8 million of borrowings (either via bank loans or long Contracts For Diff erence) then the Shareholders' funds are 8% geared. Normally, the
higher the gearing factor, the more sensitive an investment trust's shares will be to the movements up and down in the value of the investment portfolio.
Net asset value is sometimes also described as "shareholders' funds", and represents the total value of the Company's assets less the total value of its liabilities. For valuation purposes it is common to express the net asset value on a per share basis
If the share price of the Company is higher than the net asset value per share, the Company's shares are said to be trading at a premium. The premium is shown as a percentage of the net asset value. The opposite of a premium is a discount
The return generated in the period from the investments:
An increasingly popular way for investment trust companies to return cash to their shareholders is through off ering to repurchase a proportion of shares currently held. Companies seek the permission of shareholders to do so at their annual general meetings allowing them to repurchase a proportion of their total shares (up to 14.99%) in the market at prices below the prevailing net asset value per share. This process is also used to enhance the net asset value per share and to reduce the discount to net asset value
Shareholders' funds are also described as "net asset value" and represent the total value of the Company's assets less the total value of its liabilities
The value of the fi xed asset investments at fair value plus the fair value of the underlying securities within the Contracts For Diff erence
The return on the ordinary share price or net asset value per share taking into account the rise and fall of ordinary share prices and the dividends paid to shareholders. Any dividends received by the shareholder are assumed to have been reinvested in additional ordinary shares (for share price total return) or the Company's assets (for net asset value total return)
The Fidelity Individual Savings Account ("ISA") is off ered and managed by Financial Administration Services Limited. The Fidelity Investment Trust Share Plan is managed by FIL Investments International. Both companies are authorised and regulated by the Financial Services Authority. The Fidelity Investment Trust Share Plan is administered by Bank of New York Mellon and shares will be held in the name of Bank of New York Nominees Limited.
The value of savings and eligibility to invest in an ISA will depend on individual circumstances and all tax rules may change in the future. Fidelity investment trusts are managed by FIL Investments International. Fidelity only gives information about its own products and services and does not provide investment advice based on individual circumstances. Should you wish to seek advice, please contact a Financial Adviser.
Please note that the value of investments and the income from them may fall as well as rise and the investor may not get back the amount originally invested. Past performance is not a guide to future returns. For funds that invest in overseas markets, changes in currency exchange rates may aff ect the value of your investment. Investing in small and emerging markets can be more volatile than older developed markets.
Reference in this document to specifi c securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity.
Issued by Fidelity Asian Values PLC
Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and symbol are trademarks of FIL Limited.
The contents of websites referred to in this document do not form part of this Half-Yearly Report.
Share fraud includes scams where investors are called out of the blue and off ered shares that often turn out to be worthless or non-existent, or an infl ated price for shares they own. These calls come from fraudsters operating in 'boiler rooms' that are mostly based abroad.
While high profi ts are promised, those who buy or sell shares in this way usually lose their money.
The Financial Services Authority (FSA) has found most share fraud victims are experienced investors who lose an average of £20,000, with around £200m lost in the UK each year.
If you are off ered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or research reports, you should take these steps before handing over any money:
If you use an unauthorised fi rm to buy or sell shares or other investments, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.
If you are approached about a share scam you should tell the FSA using the share fraud reporting form at www.fsa.gov.uk/scams, where you can fi nd out about the latest investment scams. You can also call the Consumer Helpline on 0845 606 1234.
Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and symbol are trademarks of FIL Limited
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The unavoidable carbon emissions generated during the manufacture and delivery of this document, have been reduced to net zero through a verifi ed, carbon off setting project.
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