AGF - AMP Capital China Growth Fund

[djones]

AMP Capital China Growth Fund

http://www.ampcapital.com.au/china/theoffer/default.asp

Interested to know your thoughts of this fund and interested to know whether you think the shares will trade at a discount in january 07.

Cheers,
- Duncan

 

[chops_a_must]

Re: AMP Capital China Growth Fund

Would like to know what they are investing in before I'd commit any money to it.

 

[shinobi346]

Re: AMP Capital China Growth Fund

A class china shares. Exactly which companies I don't think it mentioned when I looked at the prospectus a couple of weeks back.

 

[X888]

Re: AMP Capital China Growth Fund

Are these tradable on the ASX ?

 

[scsl]

Re: AMP Capital China Growth Fund

Are these tradable on the ASX ?

Yes. This fund can be considered a listed investment company (LIC). The ASX code will be AGF.

IMO, it will begin life trading above its net tangible assets (compared to the majority of LICs, which are trading below NTA). AGF will be investing in Chinese A shares, which even untill today is very hard to be able to invest in - only 2 other funds in the world allow exposure to A shares.

Compared to H shares (which are Chinese companies listed in Hong Kong), A shares are seen as the 'real China' and where the undiscovered gems are going to be found. Undiscovered because the majority of investors are ordinary Chinese investors who lack the expertise of institutional investors. This is in contrast to H shares, which have been driven largely by institutional investors.

I didn't find out about this fund until after the close date, but will be watching it very closely. For those interested, have a look at p16 of the latest Smart Investor magazine.

 

[louie]

Re: AMP Capital China Growth Fund

For those interested, have a look at p16 of the latest Smart Investor magazine.

I have applied for these.
But I am interested in what Smart Investor magazine has to say.
Is it possible to let us know.

Many Thanks

 

[shinobi346]

Re: AMP Capital China Growth Fund

I can't wait till Friday.

So only 2 and this one have access to A class huh? It's exclusiveness is something the US will be fighting against at the WTO which until things change, this fund will be well placed to take advantage of.

 

[scsl]

Re: AMP Capital China Growth Fund

I have applied for these.
But I am interested in what Smart Investor magazine has to say.
Is it possible to let us know.

Many Thanks

- SI calls it a bit of a landmark - because it invests in Chinese A shares.

- Vast majority of Chinese listed companies are listed on the Shanghai and Shenzhen exchanges. The shares that trade there are A shares. Majority of funds that say that they invest in China actually invest in H shares. This is where big landmark issues have taken place of late. Demand and hence the share prices of H shares has been largely due to the big end of town. SI gives an example of the difference in behavior between A shares and H shares. A recent listing of a huge Chinese bank, ICBC, was the first stock to list simultaneously in Hong Kong (H shares) and Shanghai (A shares). Since they’re stocks of the same company, you’d expect them to trade the same way. But they don’t – H shares did vastly better on debut. [That’s why I’m thinking this is a good time to get in on A shares – before the institutional investors start to come in. And this will eventually happen!]

- Frontier stuff. A shares are governed by very strict Chinese regulation not Hong Kong’s, which is what has made H shares more appealing for investors over the years . However, China’s regulation is improving by leaps and bounds.

- Be cautious in that China’s stockmarket doesn’t necessarily reflect China’s economy. E.g. this year’s been great, but there was a period earlier this decade when the market halved in value while China itself grew at 9 per cent in the year. [I don’t see something as drastic happening anymore, particularly as more of China’s population put a portion of their savings into the sharemarket and also become more intelligent and aware.]

- Be prepared for volatility and uncertainty. Also, one odd thing about LICs is that they can trade well above or below of what they actually own [- what I referred to as NTA].

- Fees will be hefty, but is expected in a specialist asset class. 1.772 per cent base/ongoing fees plus a performance fee of 20 per cent on all outperformance above the benchmark – an index called the S&P/CITIC 300 Total Return. [Honestly, I’d be willing to pay more because it’s going to be a long time before foreign retail investors can participate in A shares.]

Good luck for your application of shares! I hope you and others who applied for this don't get scaled back. I'd be surprised if demand from both retail and institutional wasn't high.

 

[X888]

Re: AMP Capital China Growth Fund

I have also applied for these.

Has anyone got any confirmation on what they have been allocated ?

 

[X888]

Re: AMP Capital China Growth Fund

New info available.

http://www.asx.com.au/asx/research/CompanyInfoSearchResults.jsp?searchBy=asxCode&allinfo=on&asxCode=AGF

 

[shinobi346]

Re: AMP Capital China Growth Fund

Seems like they have been allocated. It popped up in commsec today. I thought they might knock me back some because I chose not to go through a broker but they didn't which is good because I'd rather them not have my money over the holidays.

 

[X888]

Re: AMP Capital China Growth Fund

Hmm nothing popped up in mine.

Anyone else get their lot ?

 

[X888]

Re: AMP Capital China Growth Fund

Ok i've just checked it again.

It's there

Can't wait till Friday now.

 

[scsl]

Re: AMP Capital China Growth Fund

X888 and shinobi, in the letter regarding the allocation of shares, was there any mention of scaling back? Or if you haven't yet received this, did both of you receive what you applied for?

 

[X888]

Re: AMP Capital China Growth Fund

Yeah I got all that I applied for, should be getting statements in the mail this afternoon.

 

[scsl]

Re: AMP Capital China Growth Fund

Yeah I got all that I applied for, should be getting statements in the mail this afternoon.

Nice to hear mate! Seeing as you did, it probably meant that demand for this fund wasn't considerably high. It'll be very interesting to see how it goes on its debut this Friday. But, there could be some arrangements that I'm unaware of, so it may well debut at a good premium on Friday...

Browsing through the link djones gave in the first post, this stock will be available for margin lending, ranging from 50-65%. Anyways, I'll be doing more reading and research on this stock, but I've liked everything I've read so far. For those interested, there are 2 research reports available on the link, both look very detailed - I'll be going through it.

 

[Caliente]

Re: AMP Capital China Growth Fund

A shares - Renminbi (RMB) denominated shares issued by companies registered in mainland China and listed on the Shanghai or Shenzhen stock exchanges. They are only available to domestic investors, QFII licence holders and approved foreign investors under the strategic investment scheme. (This scheme permits foreign business entities to take a minimum approved 10% stake in A share companies, but holdings must be held for at least three years).

Thats a bit dodgy isn't it? I What if the company is a total dog, the fund managers wont be able to do anything about it???

 

[louie]

Re: AMP Capital China Growth Fund (AGF)

AMP Capital China Growth Fund (AGF)

Listed today & closed $1.035.

Above its $1.00 Float Price.

There is a lot of positive reports about this stock. Even my Accountant today said to me he reckons this will really do well, once it gets its teeth into trading & investing in Chinese "A" shares, due to it, really being untapped.

 

[scsl]

Re: AMP Capital China Growth Fund

A shares - Renminbi (RMB) denominated shares issued by companies registered in mainland China and listed on the Shanghai or Shenzhen stock exchanges. They are only available to domestic investors, QFII licence holders and approved foreign investors under the strategic investment scheme. (This scheme permits foreign business entities to take a minimum approved 10% stake in A share companies, but holdings must be held for at least three years).

Thats a bit dodgy isn't it? I What if the company is a total dog, the fund managers wont be able to do anything about it???

I think you might be a little confused. A shares can be bought by 'approved foreign investors' under the 'strategic investment scheme', however, AMP was granted access to A shares not as an 'approved foreign investor', but via the QFII licence. There is a distinct difference, seeing as QFII holders do not have to commit funds for a certain number of years (but of course can if they choose to). Ie, this fund can hold a minute percentage of a company's shares for a few days or it can effectively take a significant shareholding for an indefinate period - they can be seen as your common fund manager.

IMO, if AMP were allowed to invest in China as an 'approved foreign investor', they would have been unlikely to have gone on to create a listed fund. The risks are much higher (but there is also potential for great returns).

 

[shinobi346]

Re: AMP Capital China Growth Fund

Here is some more info on the QFII licence. There aren't too many of them around which is what makes this Aussie fund so special.

http://www.jsfund.cn/en/qfii/qfii.jsp