Fidelity sells down ADR holding in PetroChina
Eric Ng in Beijing
Fidelity Investments, the world's largest mutual fund firm, has sold 90.6 per cent of its American depositary receipt (ADR) holdings in PetroChina amid pressure from United States activist groups on institutional investors to divest their shares in the mainland's largest oil producer due to its parent firm's heavy investments in Sudan.
According to a May 15 filing with the US Securities and Exchange Commission, FMR Corp, the ultimate parent for various Fidelity funds, sold 4.07 million PetroChina ADRs over the first three months of the year, or 90.6 per cent of its ADR holding as of the end of last year.
One ADR - which is a US-traded vehicle holding foreign-listed shares - represents 100 PetroChina H shares, making the offloaded stake equivalent to 407.9 million shares.
Including its directly held H shares, FMR still owns 652.1 million PetroChina shares, based on an overall holding of 1.07 billion shares at the end of last year, according to a February 14 filing.
Fidelity, which did not say why it sold the shares, raised its stake in PetroChina substantially in the fourth quarter last year. It owned only 205 million shares at the end of September, according to Bloomberg data.
PetroChina shares fell as much as 0.8 per cent yesterday but ended up 0.8 per cent at HK$10.14.
They have risen more than 13 per cent since the firm announced a key oil find early this month. They are down almost 8 per cent since January. The ADRs opened higher in US morning trading.
'Whether investors buy or sell our shares is their own choice,' said deputy chairman Jiang Jiemin on the sidelines of the annual shareholders' meeting yesterday.
Fidelity in late January became a target of activists who launched a campaign for it to divest from China oil firms operating in Sudan.
A bill has been tabled in the Massachusetts legislature requiring the state pension fund to divest from Sudan. It is expected to be passed and signed by governor Deval Patrick, who spent a year on a UN youth training project in Sudan's Darfur region, which has been hit by fierce pro-government militia attacks.
Khartoum is accused of using oil money to fund the attacks, which reportedly have killed hundreds of thousands of people and displaced more than a million since 2003.
Washington has called the atrocities genocide and has prohibited US companies from doing business in the blighted country since 1997. However, they can own shares in foreign firms operating there.
Billionaire Warren Buffett's Berkshire Hathaway was also one of the activists' targets, but at the behest of their chairman, shareholders this month voted down a proposal to divest PetroChina shares.
Mr Buffett argued that the listed company had no control over the investment decisions of its parent, China National Petroleum Corp.
CNPC and China Petroleum & Chemical Corp (Sinopec) have projects with Sudan's oil company Sudapet.