The stock market performance in China can be described as “tragic” in 2011. Shanghai Composite Index was down 21.68, while Shenzhen Component Index declined 28.41% last year. The vast majority of Chinese investors suffered heavy losses. However, based on Guangzhou Evening News, what appeases Chinese investors’ unhappiness is that several international stock market legends that invested in Chinese stock market, including Anthony Bolton and Warren Buffett, were also hammered last year.
“European Stock God” Slumped In China
Known as Britain’s most famous fund manager and investor, Anthony Bolton is called “European stock god”. The Fidelity China Special Situations fund managed by him fell 32.3% last year, dragging the Fidelity China fund down about 1.1 million pounds.
Fidelity experienced a year of bad luck in China. The firm lost big in its positions in Mengniu Dairy Company Ltd., Besunyen Holdings Company Ltd., and King International (Group) Holding Ltd. The dairy giant Mengniu experienced the melamine incident in 2011, and its stock price was down 11.84%. Later, Mengniu’s products was detected to contain carcinogens, and the stock plunged more than 20%. The health tea producer Besunyen was recently accused for illegal advertising, and its price was down 36% after the company released its profit guidance. King International’s shampoo was also detected to contain carcinogens dioxane, and its share price dropped 64% in 2011.
Anthony Bolton is very optimistic about the Chinese market in recent years. He said that investors in developed countries will continue to invest in emerging markets like China in the next few years. Despite China’s own problems and challenges, Bolton still believes China is his first choice. In April 2010, Anthony Bolton moved to Hong Kong and started to manage the Special Situations fund in China. It’s uncertain that will the “European stock god” change his course after his big loss in 2011.
BYD Became Buffett’s Hot Potato
Anthony Bolton is not the only one who lost in Chinese market. Coincidentally, reports showed that Warren Buffett lost approximately $1.7 billion in Asia-Pacific. Buffett’s stake in BYD Automobile Co lost 50% in 2011, and became a hot potato.
Hedge fund titan John Paulson also faces challenges. Paulson’s 3.5 million shares in Sino-Forest Corp lost more than $500 million after the Chinese company was accused to be a Ponzi scheme and was valued less than $1 per share.
Further reading on Chinese stock market:
- Anthony Bolton takes a hammering but remains upbeat about the future of China, by Ian Fraser
- Betting against China... Is this wise? by Anthony Harrington
- Roller-coaster ride for Chinese equities, by Ian Fraser
- Betting on Chinese equities as short-sellers predict Sino Armageddon, by Ian Fraser
- China’s Financial System: Challenges and Opportunities, by Fred Hu
- Savings is a Growth Industry, by Anthony Bolton
Tags: Anthony Bolton , banking , China , chinese , Chinese banks , Chinese economy , credit rating agencies , Fidelity China Special Situations , financial crisis , Hong Kong stock exchange , stock exchanges , stock markets , stocks and shares