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Bolton’s China fund can invest in A shares

Anthony Bolton’s China special situations trust and Fidelity Investment Managers Hong Kong have received a licence to invest in Chinese mainland A shares.

Fund firms wanting to access the Chinese A-share market have to apply for a qualified foreign institutional investor licence and, once it has been granted, they are given an investment limit.

A Fidelity spokesman confirms it has been given the licence but has not been told what limit has been awarded.

At admission, Fidelity did not have a QFII license. Bol-ton’s China special situations investment trust sought exp-osure to Chinese A shares through indirect investment.

The prospectus of the investment trust hinted it may at some point invest in A shares both directly through the QFII licence and indirectly through other investments, including equity-linked securities, derivatives and collective investment schemes.

China’s stocks are listed as A shares, B shares and H shares. China B shares, which are pay-able in a foreign currency, were originally developed to enable foreign investors access to the Chinese stockmarket. A shares are only for residents of the Chinese mainland. There are more than 10 times the number of A shares than B shares.

The Fidelity China special situations trust has confirmed its proposed C-share issue with an issue price of 100p to deal with the trusts’ current significant premium. Fidelity will issue the shares publicly but give priority to existing shareholders as part of an open offer for subscription and placing.

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