Interim Results
FIDELITY ASIAN VALUES PLC
Preliminary Announcement of Unaudited Interim Results
for the six months ended 31 January 2004
Performance
For the six months to 31 January 2004, Fidelity Asian Value's net asset value
per share rose by 15.1%. In comparison, the benchmark MSCI All Countries
(Combined) Far East Free ex Japan Index gained by 14.1%. (All figures in
sterling terms and on a total return basis.)
The discount at which the ordinary shares traded to the net asset value of the
Company widened to 13.50% at the period end from 9.55% six months ago.
Markets
Asian stock markets rebounded during the six months to 31 January 2004. At the
beginning of the review period, investor sentiment in the region recovered from
the uncertainty aroused by the earlier SARS epidemic, which affected most
regional markets during the second quarter of 2003. Increasing risk appetite
among international investors then helped push the regional markets higher,
despite some late profit-taking.
Among the larger markets, Hong Kong was the only one that managed to outperform
the benchmark during the period. The territory benefited from reflationary
efforts engineered jointly by the local and Chinese governments in the third
quarter of 2003, thereby helping the territory to return 21.7%. Mainland-based
commodity stocks were also traded actively in Hong Kong in the wake of rising
commodity prices worldwide.
Meanwhile, other larger markets saw modest gains. South Korea returned 10.5%
with market momentum being driven by buying in export oriented sectors.
Financial services stocks were depressed by the credit card problems in the
country.
The Singaporean stockmarket returned 9.8% as reflation efforts helped to
provide some trading incentives. The Taiwanese stock market benefited from
gains in traditional cyclical stocks and banks, but investors' anticipation of
the peaking of the seasonal demand cycle for electronics products dampened the
performance of selected technology stocks. The Taiwanese market underperformed
the benchmark with a return of 8.5% during the period.
Among the smaller markets, Thailand and Indonesia emerged as key outperformers
in the region with returns of 38.5% and 34.2% respectively. This was due to
strong economic growth momentum. Meanwhile, the Philippine and Malaysian
markets underperformed the benchmark with moderate returns of 6.4% and 0.7%
respectively.
Portfolio Review
The Company outperformed the benchmark during the review period with the net
asset value returning 15.1% against the benchmark's return of 14.1%. This
outperformance was attributable to the level of gearing in the Company.
On the positive side, the Company's overweight position in commodity companies
contributed to performance, as these stocks surged strongly in the wake of
increasing demand for commodities amid signs of improvement in the global
economy.
The Company's overweight position in the Hong Kong trading conglomerate and
property stocks also aided performance. These sectors were major beneficiaries
of the reflation effort in the territory. An overweight position in the
non-benchmark Indian stockmarket, which rose by 33.9% during the period, also
contributed to performance.
On the negative side, the Manager's unrewarding stock selection in the
Taiwanese and Malaysian markets affected performance. Some of the Company's
underweight Taiwanese technology stocks suffered from negative returns during
the period. The Company's underweight position in traditional Taiwanese
cyclical stocks, which jumped sharply, also had an adverse impact.
In Malaysia, overweight positions in a non-benchmark oil and gas company and a
gaming stock were unhelpful. The energy stock exhibited very volatile trading,
while the gaming stock underperformed the benchmark.
The Manager realigned the portfolio to take advantage of the domestic reflation
theme in the region at the beginning of the period. Towards the period end, the
Manager adopted a more defensive stance, as the share prices of a number of
stocks seemed to have run ahead of their fundamentals.
Outlook for the Region
In the months ahead, most economists expect export activity to be boosted by a
resurgence of external demand from western economies. In particular, improving
US growth expectations should be positive for Asian equities, whilst evidence
of rising orders for electronic components could provide further grounds for
optimism.
China is likely to remain the growth engine of the region and the importance of
intra-Asian trade should not be underestimated. The trend towards outsourcing
is expected to boost the outlook for export-related businesses, particularly
those in Hong Kong, Korea and Taiwan. However, stock picking based on in-depth
analysis is of particular importance in this area, as the growth expectations
for the companies involved can be extremely demanding.
On the risk front, concerns over avian influenza may continue to cloud investor
sentiment in the short term. Political uncertainties relating to the
forthcoming elections in most Asian countries could affect regional markets.
Meanwhile, volatility caused by these risks should be well cushioned by the
attractive valuations of the regional markets when compared to global peers.
Directorate
Following the sad death of Roger Hulett in late 2003 the Board has appointed
Hugh Bolland as a Director of the Company with effect from 11 March 2004. Hugh
has a wealth of experience of investing in Asia and will be a valuable addition
to the Board.
11 March 2004
Enquiries:
Barbara Powley - Fidelity Investments International
01737 836883
FIDELITY ASIAN VALUES PLC
Statement of Total Return (incorporating the revenue account) for the six
months ended
31 January 2004
for the six months for the year ended for the six months ended
ended
31.01.04 31.07.03 31.01.03
unaudited audited unaudited
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses)
on
investments - 7,169 7,169 - (1,946) (1,946) - (12,291) (12,291)
Income from UK
dividends - - - 85 - 85 - - -
Income from UK
scrip 41 - 41 - - - - - -
dividends
Income from
overseas 944 - 944 1,806 - 1,806 358 - 358
dividends
Income from
overseas scrip
dividends - - - 4 - 4 4 - 4
Interest on 133 - 133 266 - 266 137 - 137
securities
Deposit income 4 - 4 32 - 32 24 - 24
Investment
management fee (392) - (392) (705) - (705) (371) - (371)
Other expenses (173) - (173) (344) - (344) (173) - (173)
Exchange - (174) (174) - (95) (95) - (82) (82)
losses
Net return/
(loss)
before finance
costs and 557 6,995 7,552 1,144 (2,041) (897) (21) (12,373) (12,394)
taxation
Exchange gain
on loan - 2,198 2,198 - 567 567 - 1,048 1,048
Interest (575) - (575) (1,262) - (1,262) (639) - (639)
payable
Return/(loss)
on
ordinary
activities
before tax (18) 9,193 9,175 (118) (1,474) (1,592) (660) (11,325) (11,985)
Tax on
ordinary
activities (143) - (143) (214) - (214) (32) - (32)
Return/(loss)
on
ordinary
activities
after tax for
the
period,
transfer
(from)/to (161) 9,193 9,032 (332) (1,474) (1,806) (692) (11,325) (12,017)
reserves
Return/(loss)
per
ordinary share
Basic (0.17p) 9.83p 9.66p (0.36p) (1.57p) (1.93p) (0.74p) (12.11p) (12.85p)
These accounts have been prepared in accordance with the AITC Statement of
Recommended Practice ('SORP') issued in January 2003.
FIDELITY ASIAN VALUES PLC
Balance Sheet
as at 31 January 2004
31.01.04 31.07.03 31.01.03
unaudited audited unaudited
£'000 £'000 £'000
Fixed assets
Investments 85,475 78,736 67,114
Current assets
Debtors - amounts falling due within 887 276 198
one year
Cash at bank 388 343 1,117
1,275 619 1,315
Creditors - amounts falling due (1,247) (555) (321)
within one year
Net current assets 28 64 994
Total assets less current liabilities 85,503 78,800 68,108
Creditors - amounts falling due after
more than one year
Fixed rate unsecured loan (17,672) (19,870) (19,389)
Total net assets 67,831 58,930 48,719
Capital and reserves
Called up share capital 23,376 23,376 23,376
Share premium account 7 7 7
Capital redemption reserve 2,330 2,330 2,330
Other reserves
Other reserve 59,282 59,282 59,282
Warrant reserve 7,369 7,369 7,369
Capital reserve - realised (34,748) (35,960) (31,849)
Capital reserve - unrealised 12,339 4,489 (9,473)
Revenue reserve (2,124) (1,963) (2,323)
Total equity shareholders' funds 67,831 58,930 48,719
Net asset value per ordinary share:
Basic 72.54p 63.02p 52.10p
The results for the six months to 31 January 2004 and 31 January 2003, which
are unaudited, constitute non-statutory accounts within the meaning of s240 of
the Companies Act 1985. The latest published accounts for the year ended 31
July 2003, on which the auditors gave an unqualified report, have been
delivered to the Registrar of Companies.
FIDELITY ASIAN VALUES PLC
Cash Flow Statement
for the six months ended 31 January 2004
31.01.04 31.07.03 31.01.03
unaudited audited unaudited
£'000 £'000 £'000
Operating activities
Investment income received 861 1,802 659
Interest received 5 301 24
Investment management fee (367) (713) (583)
paid
Directors' fees paid (20) (44) (13)
Other cash payments (122) (249) (148)
Net cash inflow/(outflow)
from operating
activities 357 1,097 (61)
Returns on investments and
servicing of finance
Interest paid (581) (1,258) (635)
Net cash outflow from
returns on
investments and servicing of (581) (1,258) (635)
finance
Financial investment
Purchase of investments (32,345) (54,738) (28,403)
Exchange losses (182) (137) (112)
Disposals of investments 32,788 50,790 25,751
Net cash inflow/(outflow)
from financial
investment 261 (4,085) (2,764)
Net cash inflow/(outflow) 37 (4,246) (3,460)
before financing
Increase/(decrease) in cash 37 (4,246) (3,460)
Copies of the interim report will be posted to shareholders as soon as
practicable. Copies will also be available to the public from the Company's
registered office, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey KT20 6RP.
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