Half-yearly Report
28/03/2014 16:59
FIDELITY ASIAN VALUES PLC
Preliminary announcement of unaudited Half-Yearly results for the
six months ended 31 January 2014
Contents
Objective and Highlights
Financial Summary
Half-Yearly Report
Directors' Responsibility Statement
Twenty Largest Investments
Financial Statements
Investor Information
Directory
Glossary of Terms
Investing in Fidelity Asian Values PLC
Warning to Shareholders
Objective and Highlights
To achieve long term capital growth through investment principally in the
stockmarkets of the Asian Region (excluding Japan)
Performance for the six months ended 31 January 2014
Six months
ended
31 January
2014
Net Asset Value ("NAV") per Ordinary Share
Total Return - undiluted -1.6%
Ordinary Share Price Total Return -2.7%
MSCI All Countries Far East Free ex Japan
Index (net) Total Return -
in UK sterling terms -6.0%
One Year Performance (on a total return basis) (%)
01/02/13 01/02/12 01/02/11 01/02/10 01/02/09
to to to to to
31/01/14 31/01/13 31/01/12 31/01/11 31/01/10
NAV per ordinary
share - undiluted +0.4 +10.0 -9.8 +33.5 +72.7
Ordinary share price +1.0 +4.6 -7.7 +30.3 +68.3
MSCI All Countries
Far East Free
ex Japan Index (net)
Total Return -
in UK sterling terms -6.3 +12.1 -5.7 +27.7 +51.1
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
Financial Summary
31
January 31 July
2014 2013 % change
Assets
Total portfolio exposure1 169.9m 167.4m +1.5
Shareholders' funds 152.5m 155.8m -2.1
NAV per ordinary share - undiluted 225.56p 230.24p -2.0
Gearing2 11.4% 7.4%
Stockmarket data
Ordinary share price at period end 198.00p 204.50p -3.2
Period high 220.00p 216.00p
Period low 190.50p 171.25p
Discount to NAV at period end - undiluted 12.2% 11.2%
Period high 13.7% 13.9%
Period low 6.5% 8.9%
Results for the six months to 31 January 2014 2013
Revenue return per ordinary share 1.00p 0.25p
Capital (loss)/return per ordinary share (4.60p) 29.77p
Total (loss)/return per ordinary share (3.60p) 30.02p
Total returns (includes reinvested income) for
the six months to 31 January 2014 2013
NAV per ordinary share - undiluted -1.6% +16.1%
Ordinary share price -2.7% +12.6%
MSCI All Countries Far East Free ex Japan Index
(net)3 -6.0% +12.3%
The total exposure of the investment portfolio, including
1 exposure to the investments underlying the long CFDs
Total portfolio exposure in excess
2 of Shareholders' funds
3 In UK sterling terms
Sources: Fidelity and Datastream
Past performance is not a guide to future returns
Half-Yearly Report
as at 31 January 2014
PERFORMANCE
Over the six months to 31 January 2014, the net asset value of Fidelity Asian
Values PLC fell by 1.6%, compared with a decline of 6.0% for the MSCI All
Countries Far East ex Japan Index. In the same period the share price fell by
2.7%, which resulted in the share price discount widening from 11.2% to 12.2%.
(All figures in UK sterling terms and on a total return basis).
MARKETS
Far East ex Japan equities declined over the review period. Investors worried
about the impact of a reduction in the US Federal Reserve's bond buying
programme. In addition, whilst economic data from China was mixed, signs of
slowing growth in the overall economy dampened investor sentiment. Tightening
liquidity in China also contributed to a rise in volatility as regulators
toughened their stance to contain credit growth. Meanwhile, an improvement in
the US economy, signs of early stage recovery in the Eurozone, and continued
momentum of growth in Japan led to a reversal in investment flows in favour of
developed markets.
From a country perspective, Indonesia was the worst performer as a sharp rise
in current account deficit and currency depreciation amid slowing growth
resulted in a sell-off. Political uncertainty fuelled a decline in Thailand.
Markets in China and Hong Kong also edged lower but performed relatively
better than the regional average. This was on account of bold reform plans
announced in China which included a greater role for the private sector,
together with more focus on improving the quality of life. Defensive sectors
such as telecommunications, healthcare, utilities and consumer staples,
underperformed cyclicals as investor risk appetite was fuelled by a rise in
global growth expectations. The consumer discretionary sector ended in
positive territory, mainly driven by South Korea and China based companies.
Automobile producers, retailers and casino operators which benefit from
changing consumer preferences, mainly in China, rose strongly. Information
technology ("IT") was the best performing sector, driven by a rise in
smartphone usage which led to growth in internet usage, benefiting online
games producers and online intermediaries.
PORTFOLIO REVIEW
The Company's outperformance relative to the Index was driven by favourable
positioning in the IT sector and rewarding stock selection in the industrials
sector.
A non-index holding in online real estate portal SouFun Holdings was the
single largest contributor. The firm delivered better-than-expected earnings
growth and benefited from optimism about growth in China's property market.
Additionally, share price gains were fuelled by expectations of growth in its
e-commerce segment and new initiatives, such as mobile monetisation and the
launch of financial products. Meanwhile, internet and mobile games and instant
messaging services provider Tencent
Holdings also surged due to better-than-expected performance, driven by
socially-enabled mobile games. Within industrials, diamond processing
machinery producer Sarine Technologies was driven by its technological
advantage over competitors, rising demand in India and China and rising share
of recurring earnings. The company is likely to introduce new products which
could further boost revenue. Holdings in Haitian International, a plastic
moulding machine producer, also added value as a recovery in demand in China
helped deliver better-than-expected earnings growth. The share price in
Pacific Basin Shipping rose as management took advantage of attractive vessel
prices to expand capacity ready for an upturn in shipping rates. Elsewhere,
consumer discretionary and materials also enhanced performance. New Oriental
Education and Technology Group delivered higher margin growth by focusing on
its learning centre effciency and was supported by a potential upturn in
enrolment. In materials, a fall in interest costs bolstered Nine Dragons Paper
Holdings.
Conversely, a position in TPK Holding proved disappointing as the firm
provided subdued earnings guidance in the wake of a fall in touch screen
prices and a decline in notebook shipments. An overweight stance in Hong Kong
based real estate manager Wharf Holdings also eroded value. The company
delivered healthy half- yearly earnings growth, but declined against the
backdrop of an uncertain outlook for growth in China, which might result in
weak consumer confidence and spending.
Exposure to the consumer discretionary and materials sectors was increased
during the period. Within consumer discretionary, a new position was
introduced in South Korea based retailer Shinsegae, mainly due to attractive
valuations. The recovery currently underway in developed markets and an
increasing orientation towards consumption in Asia is likely to help boost the
export oriented South Korean economy as well as consumer confidence.
A new holding in Australia based Fairfax Media was introduced for its robust
balance sheet and the potential for growth in digital subscription and
marketing revenues. Within the materials sector, a stake was built in SIMS
Metal Management as the new management is likely to drive cost efficiencies
required to turnaround the business. On the other hand, the underweight
position in the banking sector increased after a holding in Bank of China was
sold, with the proceeds being utilised to buy shares in Ping An Insurance
which is likely to benefit from financial sector reforms in China. Exposure to
industrials also declined with the closure of the stake in Keppel Corp which
had limited upside potential.
OUTLOOK
A series of reforms announced by the government in China will support its
transition into a domestic consumption-driven economy, with a focus on
revitalising the private sector and speeding up urbanisation. Meanwhile, signs
of a synchronised improvement in the key economies of the US, Europe and Japan
bodes well for Asian exporters, particularly in South Korea and Taiwan. The
Asian region has an exceptional long-term structural growth story and we are
confident that these markets will reward investors over time. The trend of
industrialisation, urbanisation and the subsequent increase in wealth and
income are very attractive to investors, and there are many companies who can
take advantage of this.
ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE
The Alternative Investment Fund Managers Directive ("AIFMD") is a European
Directive that affects investment funds which are managed or promoted within
the European Union. Under the terms of the Directive the Company will be
required to appoint an Alternative Investment Fund Manager ("AIFM"). Whilst
the implementation date for the Directive was July 2013 the Financial Conduct
Authority ("FCA") has permitted a transitional period of one year. The Board
has reviewed the impact of the Directive on the Company's operations and has
decided in principle to appoint FIL Investment Services (UK) Limited (part of
Fidelity Worldwide Investments) as its AIFM, before the end of the
transitional period on 22 July 2014.
An additional requirement of the AIFMD is to appoint a depositary on behalf of
the Company who will oversee the custody and cash arrangements and other AIFM
responsibilities of the Company. To this end the Board has agreed in principle
to appoint J.P. Morgan Europe Limited to act as the Company's depositary. J.P.
Morgan Europe Limited is part of the same group of companies as JPMorgan Chase
Bank, who currently act and will continue to act as the Company's bankers and
custodians.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board believes that the principal risks and uncertainties faced by the
Company continue to fall in the following categories: market risk; performance
risk; gearing risk; currency risk; income-dividends risk; share price, NAV and
discount volatility risk; tax and regulatory risk; and operational risk.
Information on each of these was given in the Business Review section of the
Annual Report for the year ended 31 July 2013.
GOING CONCERN
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 financial statements as
outlined in the Annual Report for the year ended 31 July 2013.
By order of the Board
FIL Investments International 28 March 2014
Directors' Responsibility Statement
The Directors confirm to the best of their knowledge that:
a) the condensed set of financial statements contained within the Half-Yearly
financial report has been prepared in accordance with the UK Accounting
Standards Board's Statement `Half-Yearly Financial Reports';
b) the Half-Yearly report narrative above (constituting the interim
management
report) include a fair review of the information required by Rule 4.2.7R of
the FCA's Disclosure and Transparency Rules and their impact on the condensed
set of financial statements and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
c) in accordance with Disclosure and Transparency Rule 4.2.8R there have been
no related parties transactions during the six months to 31 January 2014 and
therefore nothing to report on any material effect by
such a transaction on the financial position or the performance of the Company
during that period; and there have been no changes in this position since the
last Annual Report that could have a material effect on the financial
position or performance of the Company in the first six months of the current
financial year. The Half-Yearly financial report has not been audited or
reviewed by the Company's Independent Auditor.
The Half-Yearly financial report was approved by the Board on 28 March 2014
and the above responsibility statement was signed on its behalf by Hugh
Bolland, Chairman.
Twenty Largest Investments as at 31 January 2014
Total
Exposure
Exposure Fair
Value %
Country Investment ,000
'000
CHINA Tencent Holdings 3
Provides internet,
mobile and
telecommunications,
value-added services. 10,021 6,632 5.9
China Mobile
Provides mobile
telecommunications and
related services 8,042 8,042 4.7
Nine Dragons Paper
Holdings
Manufacturers and
sells packaging, pulp,
recycled printing and
writing paper and high 5,811 5,811 3.4
value speciality paper
products.
Lenovo Group
Develops, manufactures
and markets technology
products including
personal computers,
notebooks and smart 4,813 4,813 2.8
phones.
Ping An Insurance
A leading Chinese 3,607 3,607 2.1
insurance company
Geely Auto Holdings
Researches, produces,
markets and sells
automobiles and
related components in
China. 3,091 3,091 1.8
ENN Energy Holdings
Operates gas pipeline
infrasctructure and
distributes and sells
piped and bottled gas
in China. 3,009 3,009 1.8
HONG KONG Techtronic Industries
Manufacturers and
sells electrical and
electronic products. 6,729 6,729 4.0
AIA Group 3
Provides products and
services to
individuals and
businesses for their
insurance, protection,
savings, investment
and retirement needs. 5,740 4,161 3.4
Luk Fook Holdings
International
Sources, designs,
wholesales and retails
a variety of jewellery
and other related 4,475 4,475 2.6
products.
Wharf Holdings 3
Holding company of a
group with interests
in property,
communications, media,
entertainment and 4,266 965 2.5
logistics.
Samsonite
International
Designs, manufactures
and distributes 4,073 4,073 2.4
luggage and other
travel accessories.
SINGAPORE Sarine Technologies
Develops,
manufactures, markets
and sells precision
technology products
for the planning,
processing, evaluation
and measurement of
diamonds and
gemstones. 7,320 7,320 4.3
SOUTH KOREA Samsung Electronics 3
Provides communication
products. It operates
through five live
business divisions:
communication,
semiconductor, digital
media, liquid crystall
display and home
appliances. 10,054 2,234 5.9
LG Household and
Healthcare 3
Manufactures
hoousehold goods, 5,559 2,376 3.3
cosmetics and
beverages.
Hotel Shila
Operates hotels and
duty free shops.
4,826 4,826 2.8
Amorepacific
A leading cosmetics
and pharmaceuticals
group 3,786 3,786 2.2
Shinhan Financial
Group
Banking group with
banking, credit card
and security and life
insurance businesses. 2,989 2,989 1.8
TAIWAN Taiwan Semiconductor
Manufacturing
Researches, develops,
manufacturers and
distributes integrated
circuit related
products, including
wafer manufacture and 7,909 7,909 4.7
testing, mask
Asustek Computer
Manufacturers and
distributes computers,
communication and
electronic consumber
products. 3,822 3,822 2.3
Twenty Largest Investments 109,942 90,670 64.7
Other Investments 59,968 59,968 35.3
Total Portfolio (including long
CFDs) 169,910 150,638 100.0
1 Fair value represents the carrying value in the Balance Sheet above
2 % of the total exposure of the investment portfolio, including
exposure to the investments underlying the long contracts for difference
("CFDs")
3 Investment is via equities and long CFDs
Income Statement
for the six months for the year ended for the six months ended
ended 31.07.13 31.01.13
31.01.14 audited unaudited
unaudited
revenue capital total revenue capital total revenue capital total
Notes '000 '000 '000 '000 '000 '000 '000 '000 '000
(Losses)/gains on
investments designated
at fair value through
profit or loss - (3,337) (3,337) - 24,955 24,955 - 17,437 17,437
Gains/(losses) on
derivative instruments held
at fair value through
profit or loss - 560 560 - (1,140) (1,140) - (32) (32)
Income 2 1,951 - 1,951 2,981 - 2,981 1,310 - 1,310
Investment management fee (882) - (882)(1,485) - (1,485) (674) - (674)
Other expenses (290) - (290) (592) - (592) (299) - (299)
Exchange (losses)/gains on
other net assets (57) (336) (393) (35) 299 264 (9) (58) (67)
Exchange (losses)/gains on
loans - - - - (312) (312) - 102 102
Net return/(loss) before
finance costs and
taxation 722 (3,113) (2,391) 869 23,802 24,671 328 17,449 17,777
Finance costs (52) - (52) (135) - (135) (84) - (84)
Net return/(loss) on
ordinary activities before
taxation 670 (3,113) (2,443) 734 23,802 24,536 244 17,449 17,693
Taxation on return/(loss)
on ordinary activities 3 5 - 5 (109) - (109) (99) - (99)
Net return/(loss) on
ordinary activities after
taxation for the period 675 (3,113) (2,438) 625 23,802 24,427 145 17,449 17,594
Return/(loss) per ordinary
share
Undiluted 4 1.00p (4.60p) (3.60p) 1.05p 40.01p 41.06p 0.25p 29.77p 30.02p
Diluted 4 n/a n/a n/a 1.05p 39.99p 41.04p n/a n/a n/a
Reconciliation of Movements in Shareholders' Funds
share capital other non-
share premium redemption distributable other capital revenue total
capital account reserve reserve reserve reserve reserve equity
Notes '000 '000 '000 '000 '000 '000 '000 '000
Opening shareholders' funds: 1 August
2012 14,981 1,218 2,224 7,367 15,977 73,992 1,325 117,084
Issue of ordinary shares on exercise of
rights attached to
subscription shares 7 3 20 - - - - - 23
Repurchase of ordinary shares 7 (676) - 676 - (4,946) - - (4,946)
Net return on ordinary activities after
taxation for the period - - - - - 17,449 145 17,594
Dividend paid to shareholders 5 - - - - - - (596) (596)
Closing shareholders' funds: 31 January
2013 14,308 1,238 2,900 7,367 11,031 91,441 874 129,159
Opening shareholders' funds: 1 August
2012 14,981 1,218 2,224 7,367 15,977 73,992 1,325 117,084
Exercise of rights attached to
subscription shares and conversion
into ordinary shares 7 (1) - 1 - - - - -
Issue of ordinary shares on exercise of
rights attached to
subscription shares 7 2,864 19,014 - - - - - 21,878
Repurchase of ordinary shares 7 (924) - 924 - (6,964) - - (6,964)
Net return on ordinary activities after
taxation for the year - - - - - 23,802 625 24,427
Dividend paid to shareholders 5 - - - - - - (596) (596)
Closing shareholders' funds: 31 July 2013
16,920 20,232 3,149 7,367 9,013 97,794 1,354 155,829
Repurchase of ordinary shares 7 (17) - 17 - (144) - - (144)
Net (loss)/return on ordinary activities
after taxation for the period - - - - - (3,113) 675 (2,438)
Dividend paid to shareholders 5 - - - - - - (744) (744)
Closing shareholders' funds: 31 January
2014 16,903 20,232 3,166 7,367 8,869 94,681 1,285 152,503
Balance Sheet
Company No. 3183919
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
Notes '000 '000 '000
Fixed assets
Investments designated at
fair value through
profit or loss 150,946 151,273 134,645
Current assets
Derivative assets held at
fair value through
profit or loss 1,887 736 -
Debtors 545 1,217 3,408
Amounts held in margin
accounts 805 856 -
Cash at bank 1,138 4,220 2,761
4,375 7,029 6,169
Creditors
Derivative liabilities held
at fair value through
profit or loss (2,195) (1,604) (32)
Bank loans 6 - - (9,461)
Other creditors (623) (869) (2,162)
(2,818) (2,473) (11,655)
Net current
assets/(liabilities)
1,557 4,556 (5,486)
Total net assets
152,503 155,829 129,159
Capital and reserves
Share capital 7 16,903 16,920 14,308
Share premium account 20,232 20,232 1,238
Capital redemption reserve 3,166 3,149 2,900
Other non-distributable
reserve 7,367 7,367 7,367
Other reserve 8,869 9,013 11,031
Capital reserve 94,681 97,794 91,441
Revenue reserve 1,285 1,354 874
Total equity shareholders'
funds
152,503 155,829 129,159
Net asset value per
ordinary share
Undiluted 8 225.56p 230.24p 225.69p
Diluted 8 n/a n/a 219.91p
Cash Flow Statement
six months year six months
ended ended ended
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
'000 '000 '000
Operating activities
Investment income received 1,833 2,293 894
Income received from long CFDs 21 44 -
Investment management fee paid (880) (1,451) (332)
Directors' fees paid (61) (128) (67)
Other cash payments (233) (457) (214)
Net cash inflow from operating
activities
680 301 281
Finance costs
Interest paid on long CFDs and
bank loans (51) (166) (87)
Net cash outflow from finance
costs
(51) (166) (87)
Financial investments
Purchase of investments (43,238) (113,823) (50,986)
Disposal of investments 40,700 110,751 55,598
Net cash (outflow)/inflow from
financial investments
(2,538) (3,072) 4,612
Derivative activities
Payments on long CFD positions
closed - (272) -
Movements on amounts held at
brokers 51 (856) -
Net cash inflow/(outflow) from
derivative activities
51 (1,128) -
Dividend paid to shareholders
(744) (596) (596)
Net cash (outflow)/inflow before
financing
(2,602) (4,661) 4,210
Financing
Repurchase of ordinary shares (144) (7,190) (5,172)
Exercise of rights attached to
subscription shares - 21,878 12
Net cash outflow from bank loans
repaid - (9,875) -
Net cash (outflow)/inflow from
financing
(144) 4,813 (5,160)
(Decrease)/increase in cash
(2,746) 152 (950)
Notes to the Financial Statements
1 ACCOUNTING POLICIES
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 2013.
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
'000 '000 '000
2 INCOME
Income from investments designated
at fair value
through profit or loss
Overseas dividends 1,739 2,703 1,084
Overseas scrip dividends 121 234 226
1,860 2,937 1,310
Income from derivative instruments
Dividends from long CFDs 91 44 -
Total Income
1,951 2,981 1,310
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
'000 '000 '000
3 TAXATION ON RETURN/(LOSS) ON
ORDINARY ACTIVITIES
Overseas taxation credit/(charge)
Revenue 5 (109) (99)
Capital - - -
Total 5 (109) (99)
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
4 RETURN/(LOSS) PER ORDINARY SHARE
Undiluted
Revenue 1.00p 1.05p 0.25p
Capital (4.60p) 40.01p 29.77p
Total (3.60p) 41.06p 30.02p
Diluted
Revenue n/a 1.05p n/a
Capital n/a 39.99p n/a
Total n/a 41.04p n/a
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 for the six months ended 31 January
2014. The returns for the six months were; revenue return 675,000 (31.07.13:
625,000; 31.01.13: 145,000), capital loss 3,113,000 (31.07.13: return
23,802,000; 31.01.13: return 17,449,000) and total loss 2,438,000
(31.07.13: return 24,427,000; 31.01.13: return 17,594,000). The undiluted
weighted average number of ordinary shares in issue for the six months ended
31 January 2014 is 67,610,974 (31.07.13: 59,496,253; 31.01.13: 58,605,547).
There are no diluted returns per ordinary share for the six months ended 31
January 2014 because there were no subscription shares in issue during the
period.
The diluted returns per ordinary share for the year ended 31 July 2013 were
based on the net returns on ordinary activities after taxation for that year
of: revenue return 625,000; capital return 23,802,000 and total return
24,427,000 and on the weighted average number of ordinary shares in issue
during the year, increased to include the potential number of ordinary shares
that could have been issued at the beginning of the year on the exercise of
rights attached to the subscription shares. For the purposes of calculating
this number of potential ordinary shares, the excess of the average ordinary
share price during the period over the 191 pence exercise price of a
subscription share was multiplied by the number of subscription share rights
in issue. The number of potential ordinary shares represents the number of
ordinary shares that could have been purchased at the average ordinary share
price with this excess amount. The weighted average number of ordinary shares
in issue during the year on this diluted basis was 59,515,839.
There were no diluted returns per ordinary share for the six months ended 31
January 2013 because the average ordinary share price during the period was
below the 191 pence exercise price of a subscription share.
5 DIVIDENDS
No dividend has been declared in respect of the current period. The
dividend payment of 744,000 shown in the Reconciliation of Movements in
Shareholders' Funds for the six months ended
31 January 2014, is the final dividend for the year ended 31 July 2013 of 1.10
pence per ordinary share paid on 6 December 2013. The dividend payment of
596,000 shown in the Reconciliation of Movements in Shareholders' Funds for
the year ended 31 July 2013 and for the six months ended
31 January 2013, is the final dividend for the year ended 31 July
2012 of one penny per ordinary share paid on 6 December 2012.
6 BANK LOANS
The Company had 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 until it was repaid on 28 February 2013 and
the credit facility cancelled. The Company currently uses long CFDs to achieve
gearing.
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
shares shares shares
7 SHARE CAPITAL
Issued, allotted and fully paid:
Ordinary shares of 25 pence each
Beginning of the period 67,680,213 59,918,781 59,918,781
Issue of ordinary shares on
exercise of rights
attached to subscription shares - 11,454,432 11,922
Repurchase of ordinary shares (70,000) (3,693,000) (2,703,000)
End of the period
67,610,213 67,680,213 57,227,703
Subscription shares of 0.01
pence each1
Beginning of the period - 11,454,432 11,454,432
Exercise of rights attaching to
subscription
shares and conversion into
ordinary shares - (11,454,432) (11,922)
End of the period
- - 11,442,510
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
'000 '000 '000
Issued, allotted and fully paid:
Ordinary shares of 25 pence each
Beginning of the period 16,920 14,980 14,980
Issue of ordinary shares on
exercise of rights
attached to subscription shares - 2,864 3
Repurchase of ordinary shares (17) (924) (676)
End of the period
16,903 16,920 14,307
Subscription shares of 0.01
pence each1
Beginning of the period - 1 1
Exercise of rights attaching to
subscription
shares and conversion into
ordinary shares - (1) -
End of the period
- - 1
Total share capital
16,903 16,920 14,308
1 Each subscription share gave the holder the right, but not the obligation,
to subscribe for one ordinary share upon payment of 191 pence per share, on
the last business day of each month, up to the last business day of May 2013.
On 3 June 2013 the Company appointed a Final Subscription Trustee, who
exercised on behalf of the subscription shareholders, all of the outstanding
subscription share rights on the same terms and sold the resulting ordinary
shares in the market.
8 NET ASSET VALUE PER ORDINARY SHARE
The undiluted net asset value per ordinary share is based on net
assets of 152,503,000 (31.07.13: 155,829,000; 31.01.13: 129,159,000) and on
67,610,213 (31.07.13: 67,680,213; 31.01.13: 57,227,703) ordinary shares, being
the number of ordinary shares in issue at the period end.
There is no diluted net asset value per ordinary share at 31
January 2014 or at 31 July 2013 because all the rights attached to
subscription shares were exercised during the year ended 31 July 2013. The
diluted net asset value per ordinary share for the period ended 31 January
2013 was calculated on the basis of what the financial position would have
been, had all the
rights attached to the 11,442,510 subscription shares in issue at that date,
been exercised on that date. This basis of calculation is in accordance with
guidelines laid down by the Association of Investment Companies.
9 INVESTMENT TRANSACTION COSTS
Investment transaction costs are incurred in the acquisition and disposal of
investments. These are included in the (losses)/gains on investments
designated at fair value through profit or loss in the capital column of the
Income Statement as summarised below:
31.01.14 31.07.13 31.01.13
unaudited audited unaudited
'000 '000 '000
Purchases 69 385 103
Sales 98 592 193
167 977 296
10 UNAUDITED FINANCIAL STATEMENTS
The results for the six months to 31 January 2014 and 31 January 2013, which
are unaudited, constitute non-statutory accounts within the meaning of Section
435 of the Companies Act 2006. The figures and financial information for the
year ended 31 July 2013 are extracted from the latest published financial
statements. These financial statements, on which the Independent Auditor gave
an unqualified report, have been delivered to the Registrar of Companies.
Investor Information
CONTACT INFORMATION
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.fidelity.co.uk/its
Existing investors who have a specific query regarding their holding or need
to provide updated information, for example a change of address, should
contact the appropriate administrator:
Holders of ordinary shares:
Capita Asset Services, 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: shareholderenquiries@capita.co.uk
Details of individual shareholdings and other information can also be obtained
from the Registrar's website: www:capitaassetservices.com
Fidelity Share Plan investors: 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 ISA investors:
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.fidelity.co.uk/its
General enquiries should be made to Fidelity, the Investment Manager and
Secretary, at the Company's registered office: FIL Investments International,
Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey KT20 6RP.
Telephone: 01732 361144 Fax: 01737 836892 http://www.fidelity.co.uk/its
FINANCIAL CALENDAR 2014
31 January - Half-Yearly period end
28 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
Directory
BOARD OF DIRECTORS INDEPENDENT AUDITOR
Hugh Bolland (Chairman) Grant Thornton UK LLP
William Knight Chartered Accountants
(Senior Independent Director) and Registered Auditor
Grahame Stott 30 Finsbury Square
(Audit Committee Chairman) London
Kate Bolsover EC2P 2YU
Philip Smiley
BANKERS AND CUSTODIAN
MANAGER, SECRETARY AND JPMorgan Chase Bank (London Branch)
REGISTERED OFFICE 125 London Wall
FIL Investments International London
Beech Gate EC2Y 5AJ
Millfield Lane
Lower Kingswood REGISTRARS
Tadworth Capita Asset Services
Surrey The Registry
KT20 6RP 34 Beckenham Road
Beckenham
FINANCIAL ADVISERS Kent
AND STOCKBROKERS BR3 4TU
Canaccord Genuity Ltd
88 Wood Street LAWYERS
London Slaughter and May
EC2V 7QR One Bunhill Row
London EC1Y 8YY
Speechly Bircham LLP
6 New Street Square
London
EC4A 3LX
Glossary of Terms
BENCHMARK INDEX
MSCI All Countries Far East Free ex Japan Index (net).
CONTRACT FOR DIFFERENCE (CFD)
A Contract For Difference is a derivative. It is a contract between the
Company and an investment house at the end of which the parties exchange the
difference between the opening price and the closing price of an underlying
asset of the specified financial 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 Difference allows the Company to
gain access to the movement in the share price by depositing a small amount of
cash known as margin. A company may reason that the asset price will rise, by
buying ("long" position) or fall by selling ("short" position). If a company
trades long, dividends are received and interest is paid. If a company trades
short, dividends are paid and interest is received. The Company only intends
to use long Contracts For Difference.
DERIVATIVES
Financial instruments (such as futures, options and Contracts For Difference)
whose value is derived from the value of an underlying asset.
DISCOUNT
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.
FAIR VALUE
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:
- Listed investments valued at bid prices, or last market prices,
where available, otherwise at published price quotations;
- Unlisted investments valued using an appropriate valuation
technique in the absence of an active market; and
- Contracts For Difference valued as the difference between the
settlement price of the contract and the value of the contract (unrealised
gains or losses).
GEARING
Gearing describes the level of the Company's borrowing and is expressed as a
percentage. It can be obtained through the use of bank loans, bank overdrafts
or Contracts For Difference in order to increase the Company's exposure to
stocks. If assets rise in value, gearing magnifies the return to shareholders.
Correspondingly, if the assets fall in value, gearing magnifies the fall.
Gearing reflects the amount of leverage the Company uses to invest in the
market. Contracts For Difference are used as a way of gaining exposure to the
price movements of shares without buying the underlying shares directly.
GEARING PERCENTAGE
In a simple example, if the Company has 100 million of net assets
and 8 million of borrowings (either via bank loans or long Contracts For
Difference) then the Shareholders' funds are 8% geared. Normally, the higher
the gearing percentage, the more sensitive, the Company's investment trust's
shares will be to the movements up and down in the value of the investment
portfolio.
NET ASSET VALUE (NAV)
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.
PREMIUM
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.
RETURN
The return generated in the period from the investments:
- Revenue Return reflects the dividends and interest from
investments and other income net of expenses, finance costs and taxation;
- Capital Return reflects the return on capital, excluding any
revenue returns; and
- Total Return reflects the aggregate of revenue and capital
returns in the period.
SHARE REPURCHASES
An increasingly popular way for investment trust companies to return cash to
their shareholders is through offering 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
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.
TOTAL PORTFOLIO EXPOSURE
The value of the fixed asset investments at fair value plus the fair value of
the underlying securities within the Contracts For Difference.
TOTAL RETURN PERFORMANCE
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).
Investing in Fidelity Asian Values PLC
FURTHER INFORMATION
The Fidelity Individual Savings Account ("ISA") and Junior ISA are offered
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 Conduct 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 affect the value of
your investment. Investing in small and emerging markets can be more volatile
than older developed markets.
Reference in this document to specific 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 the symbol are trademarks of FIL Limited.
The contents of websites referred to in this document do not form part of this
Half-Yearly Report.
24
Warning To Shareholders
SHARE FRAUD WARNING
Share fraud includes scams where investors are called out of the blue and
offered shares that often turn out to be worthless or non-existent, or an
inflated price for shares they own. These calls come from fraudsters operating
in `boiler rooms' that are mostly based abroad.
While high profits are promised, those who buy or sell shares in this way
usually lose their money.
The Financial Conduct Authority ("FCA") 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.
PROTECT YOURSELF
If you are offered 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:
1. Get the name of the person and organisation contacting you.
2. Check the FCA Register at www.fca.org.uk/register to ensure they
are authorised.
3. Use the details on the FCA Register to contact the firm.
4. Call the FCA Consumer Helpline on 0800 111 6768 if there are no
contact details on the Register or you are told they are out of date.
5. Search the FCA's website for a list of unauthorised firms and
individuals to avoid doing business with.
6. REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm 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.
REPORT A SCAM
If you are approached about a share scam you should tell the FCA
using the share fraud reporting form at www.fca.org.uk/scams, where you can
find out about the latest investment scams. You can also call the Consumer
Helpline on 0800 111 6768.
If you have already paid money to share fraudsters you should contact Action
Fraud on
0300 123 2040