Fidelity continues as a major investor in the Sudanese oil industry
- In calendar Q1 of 2007, Fidelity sold most of their holdings on the New York Stock Exchange of both PetroChina and Sinopec. They sold 91 percent of PetroChina ADR shares and 99% of Sinopec ADR shares. Details here. In calendar Q2, the Fidelity funds that had been selling ADRs of PetroChina and Sinopec completed their sell off.
- More details on Fidelity's continued holdings will emerge over the coming weeks. Current estimates of Fidelity's holdings, from its US mutual funds and overseas investments are:
- $500-800 million of PetroChina
- $200m of Sinopec, assuming Fidelity's Hong Kong holdings showed no change
- See the tables below for details on Fidelity's holdings over time.
PetroChina holdings on 12/31/06
- Fidelity's total share of PetroChina is 5.0% with 1,065,007,500 H share equivalents, according to their February 14, 2007, 13G SEC filing. This filing gives the first complete view of Fidelity's PetroChina holding.
- Fidelity's holdings in PetroChina are worth about $1.3 billion, based on the February 14, 2007, share price.
Sinopec, aka China Petroleum on 12/31/06
- Fidelity's holdings in Sinopec have to be pieced together from various filings.
- Thomson financial reporting service reports Fidelity with about $250 million in Sinopec holdings as of 12/31/06.
- A partial list of Fidelity's Sinopec ownership shows $99 million that we can account for by fund, including $55.8 million on the NYSE (using the February 14 share price) and at least $43.4 million on the Hong Kong Stock Exchange (using values listed in the Oct 31 quarterly reports for the few funds noted).
Notes
- Fidelity had been the single largest public investor in PetroChina on the NYSE and had been increasing its holdings in recent years.
- As of December 31, Fidelity was one of the two largest investors in PetroChina, counting shares held around the world, second only to Berkshire Hathaway. Click here for more information on Berkshire Hathaway and PetroChina.
- At the same time, ethically responsible investors were recognizing and addressing the problem of investing in companies which help to support the government of Sudan and fund the genocide in Darfur, Fidelity had been increasing its investment in Chinese oil companies doing business in Sudan.
- Click here for more information on problem oil companies operating in Sudan - PetroChina and Sinopec (aka China Petroleum).
- Click the following links for the list of the top major holders, on the NYSE, in PetroChina - PTR and Sinopec -SNP (aka China Petroleum) - as listed at Yahoo Finance.
Fidelity funds known to be holding PetroChina or China Petroleum
Note that this is only a partial list of funds, based on checking individual fund reports.
Fidelity Fund - Contra fund |
Holds PetroChina no since 6/30/07 |
Holds (Sinopec) China Petroleum no since 3/31/07 no since 3/31/07 no since 12/31/05 no since 5/31/07 no since 1/31/07 no no YES on 4/30/07 YES on 3/31/07 |
Fidelity funds on the New York and Hong Kong Stock Exchanges
| 6/30/07 Shares |
3/31/07 Shares |
12/31/06 Shares |
12/31/05 Shares |
12/31/04
Shares | ||
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| PetroChina PTR shares-NYSE |
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| Contra fund-FCNTX | 0 | 269,800 | 3,212,400 | 2,163,200 | 593,100 | |
| VIP Contra fund (CIK 831016) | 0 | 73,992 | 880,300 | 703,300 | 173,600 | |
| Advisor New Insight fund-FNIAX | 0 | 73,000 | 350,000 | 123,700 | 7,500 | |
| New Millennium-FMILX ** | 0 | 0 | 42,000 | tbd | tbd | |
| Other Fidelity funds | 0 | 300 | 300 | 1,060,300 | 88,600 | |
| Strategic Advisors Inc | 1,169 | 924 | 12,075 | 0 | 0 | |
| Pyramis Global Advisors LLC | 0 | 2,900 | 2900 | 0 | 0 | |
| Total Fidelity funds PTR-NYSE | 1,169 | 420,916 | 4,499,975 | 3,926,800 | 862,800 | |
| Total PTR H share equivalents | 116,900 | 42,091,600 | 449,997,500 | 392,680,000 | 86,280,000 | |
| PetroChina H shares-HKSE | ||||||
| Southeast Asia-FSEAX-H shares* | tbd | 28,578,000 | 26,320,000 | tbd | tbd | |
| Pacific Basin-FPBFX-H shares* | tbd | 0 | 0 | tbd | tbd | |
| China Region-FHKCX-H shares* | tbd | 11,702,000 | 15,232,000 | tbd | tbd | |
| China Focus A-MFFICF.L-H shares | 265,000,000^ | 410,000,000^ | 413,000,000^ | tbd | tbd | |
| Other Fidelity funds-H shares | tbd | 159,728,400^ | 160,458,000^ | tbd | tbd | |
| Total Fidelity PetroChina | tbd | 652,100,000^ | 1,065,007,500 | tbd | tbd | |
| Sinopec SNP (aka China Petroleum) shares-NYSE | ||||||
| Fidelity Contra-FCNTX | 0 | 0 | 449,800 | 738,200 | 1,789,600 | |
| Fidelity VIP Contra (CIK 831016) | 0 | 0 | 131,640 | 215,940 | 524,740 | |
| Advisor New Insight-FNIAX | 0 | 0 | 0 | 0 | 6,800 | |
| New Millennium-FMILX ** | 0 | 69,100 | 94,300 | tbd | tbd | |
| Other Fidelity Funds | -0 | -69,100 | 560 | 900 | 700 | |
| Total Fidelity funds SNP-NYSE | 560 | 560 | 676,300 | 955,040 | 2,321,840 | |
| Total SNP H share equivalents | 56,000 | 56,000 | 67,630,000 | 95,504,000 | 232,184,000 | |
| Sinopec H shares - HKSE | ||||||
| Southeast Asia-FSEAX-H shares* | tbd | 0 | 0 | tbd | tbd | |
| Emerging Markets-FEMKX-Hshares* | tbd | 38,924,800 | 40,624,800 | tbd | tbd | |
| China Focus A-MFFICF.L-H shares | tbd | 153,000,000^ | tbd | tbd | tbd | |
| Fidelity International Ltd UK-H shares | tbd | tbd | 2,346,086 | tbd | tbd | |
| Fidelity Investment Mgmt HK-H shares | tbd | tbd | 272,077,173 | tbd | tbd | |
| Other Fidelity funds- H shares | tbd | tbd | tbd | tbd | tbd | |
| Total Fidelity Sinopec | tbd | tbd | tbd | tbd | tbd |
- ** Reporting dates are one month earlier than the column heading: New Millennium fund.
- * Reporting dates are one month later than column headings: Southeast Asia, Pacific Basin, China Region, and Emerging Markets funds.
- ^ Indicates estimated value
How big would the financial impact be if Fidelity divested?
- Fidelity's Contra fund completely divested its large holdings of PetroChina and Sinopec on the New York Stock Exchange during the first two calendar quarters in 2007, without disturbing the market! This large sell-off demonstrated that they could divest hundreds of millions of dollars of shares with neglible impact to the value of the mutual funds involved in the sell-off.
- Through December 31, 2006, Fidelity Contra fund had been the largest holder of PTR on the NYSE. Using the December 31, 2006, holdings and February 14 share prices for a financial scenario, Contra fund had $394 million invested in PetroChina out of $68.13 billion in total assets.
- Consider this extreme hypothetical scenario as another way to dramatize the minimal risk to Fidelity of a large divestment. Suppose PetroChina lost half its value as a result of divestment. Each share of Contra fund, priced at $66.65 on February 14, 2007, would drop by 19 cents, which is less than three tenths of one percent. To understand how small this is, note that the Contra fund had greater volatility than this amount on 11 of the 20 days of trading in January, with no significant news or actions which might have affected the market value in some unusual way.
- No financial institution would want to court financial losses. However, in the overall context of the massive holdings by Fidelity, the actual impact to shareholders could well be negligible while, at the same time, the actual impact for Darfur could be critically important.
Fidelity does not need to buy PetroChina - other oil stocks are doing well
- Mutual fund managers who want to invest in the oil industry do not have to choose genocide in order to get good returns, since other oil companies have comparable or better returns.
- To illustrate the point, consider this example. PetroChina is a relatively new stock trading on the New York Stock Exchange for just a few years, beginning with some significant controversy. Disregarding the early years of PTR performance, here's a view of PetroChina (PTR) vs ExxonMobil (XOM) from March 2006 to March 2007 showing very good, closely comparable performance by PTR and XOM.
- Except where otherwise noted, data on this page is from published quarterly reports and summaries on Yahoo Finance.
- Fidelity's holdings on the New York Stock Exchange are ADR shares. We have good visibility to the total holdings of these shares. The Bank of New York explains ADRs (American Depositary Receipts) as "negotiable securities which represent the underlying securities of a non-U.S. company... Depositary Receipts facilitate U.S. investor purchases of non-U.S. securities and allow non-U.S. companies to have their stock trade in the United States." Click here for more information from the Bank of New York on ADRs
- Fidelity also holds large numbers of "H" shares, traded on the Hong Kong stock exchange, information for which is not so easily accessed and summarized. We do not have good visibility to the funds holding these shares. See Major Holders for some further information on "H" shares.