Fidelity China SS. HL letter re C Shares

Jake'sGran

I applied as an existing holder of the Fidelity Investment Trust
mentioned above but have today received a letter from HL which has confused me. Previous correspondence has suggested that existing holders of this IT would receive the full amount allotted.

HL has written that Fidelity's documentation had said that the C shares would only be converted to ordinary shares if the original ordinary shares continued to trade at a premium. Fidelity are now saying that the conversion could take place if the original ones are trading at a premium OR a discount.

Does any one know what this is all about?. I can cancel my application which I may well do as I don't know what is not being said!

masonic

There is an article here detailing what has happened today. It does seem to suggest that the C shares will convert even if the ordinary shares are trading at discount.

"Hence for every 100 C Shares you buy (at today's NAV) you would receive 95 Ordinary Shares, regardless of any premium or discount in the share price at the date of conversion"

Essentially you are buying at todays price and NAV, but not receiving the shares for a couple of weeks.

Edit: Having just checked out the information at H-L, I couldn't find anything about the offer not proceeding if the shares do not continue to trade at premium (I remember reading it, though). I highly suspect the statement referred to the period of time between the offer going out in January and today (and not the time between now and the 28th).

Also, I noted in the FAQ that they say if you apply for any C shares, you won't be able to cancel.

Jake'sGran

Masonic, re your last sentence, the letter from HL includes a form to be signed and returned if you do wish to cancel. Very strange.

mutley74

Jake'sGran wrote: »

Masonic, re your last sentence, the letter from HL includes a form to be signed and returned if you do wish to cancel. Very strange.

i had the same letter from HL this morning.
think i will take a punt and stick to what i had added for the c shares.
Bolton has added an extra year to his contract...
http://www.telegraph.co.uk/finance/personalfinance/investing/8318924/Anthony-Bolton-Im-not-a-China-expert.html

sabretoothtigger

Is he investing in big or small companies

Newbie2saving

Don't shoot me down , but this is from the Daily Mail today http://www.thisismoney.co.uk/investing/share-tips-and-fund-tips/article.html?in_article_id=522778&in_page_id=23

Newbie2saving

Read this brief news today, all the money has been raised for the C shares http://www.trustnet.com/News/Research.aspx?id=189877

So are those of us with the fund in or out? I'm in by the way...

Jake'sGran

Newbie2saving wrote: »

Read this brief news today, all the money has been raised for the C shares http://www.trustnet.com/News/Research.aspx?id=189877

So are those of us with the fund in or out? I'm in by the way...

You will be IN as I'm sure HL said in their original blurb that existing holders would get their full allotment.

Newbie2saving

Jake'sGran wrote: »

You will be IN as I'm sure HL said in their original blurb that existing holders would get their full allotment.

Sorry don't think I wrote my question in my previous post clearly. I meant after receiving the offer in the first instance or the letter offering us to cancel whether individuals had decided to follow through with this addtional offer? ie have you made the decision to apply and secondly to keep the application? I was just curious!

masonic

Newbie2saving wrote: »

Sorry don't think I wrote my question in my previous post clearly. I meant after receiving the offer in the first instance or the letter offering us to cancel whether individuals had decided to follow through with this addtional offer? ie have you made the decision to apply and secondly to keep the application? I was just curious!

I was very tempted to apply, but with the sharp drop off in share price and narrowing of the premium to NAV during the week of 7th Feb, this started to look like a bad deal so I didn't follow through.

As it happened, the people who subscribed to this offer will be buying at C shares at 104.41p, which, using their 95:100 ratio, equates to an ordinary share price of 109.9p. If they bought on the open market on the 11th Feb (the deadline for the open offer), the price was 107.3p, which even after charges would have been a better deal (assuming >£500 invested). Not that I bought on the open market either. The share price has been nudged up a bit since then, so it isn't all bad news.