Fidelity is targeting a record £630m raising for the fund, which has a public offer opening on February 26 and closing on April 5 with dealing to start on April 19. Shares will be available at £1.
Stagging is the practice of buying an initial public offering at the offer price and then reselling once trading has begun, usually for a profit.
Experts says this is likely to be possible for Bolton’s trust as demand is likely to see it open at a premium.
Winterflood Securities head of research Simon Elliot says: “We have not seen much of this in investment trusts since the days of TMT. It is possible if it gets oversubscribed and we could see investors take money out at £1.05/1.06 a share as money keeps coming in. I expect Fidelity will ensure market-makers have a reasonable amount of liquidity on day one.”
Miton Asset Management fund manager Nick Greenwood says: “I am sure people will be stagging it as it is Bolton and it has limited supply and is very likely to trade on a premium.”
Skerritt Consultants head of investments Andrew Merricks says: “We have seen in the past with Mercury European privatisation that investors can get their fingers burnt through stagging and it is not impossible that Bolton’s fund could open at a discount as China can be volatile and I think something may be brewing there. I like the structure but we would not look to stag the trust.”
Charles Stanley head of investment trust research Stephen Peter says: “There is a risk if it goes to a discount. I would expect most IFAs to buy and hold as this type of activity usually comes from hedge fund managers and stockbrokers.”