I want to share a very micro case study on YTL Corp. The company is quite flexible when comes to cash dividend and share dividend. When the company is seeing its share price is under pressure, they will do share buy back...The advantages,

1. Provide liquidity on days there are big sell orders....without them absorbing the sell orders, price can drop a lot faster. I have mentioned before EPF was selling like nobody business from year 2020 till April 2023, they sold something like 100 million shares, if without the company share buy back, the company share price will be way below 0.50.

2. They buy back when the price is low when sentiment was low. I give you this example during period of covid 19 from year 2020 to year 2022 and they stopped buy back after that. They think the sentiment has improved and do not need to do intervention because it can stand on its own and let the market forces govern the demand and supply. During this period they accumulated 74 million shares. average buy back price is about RM 0.82. They put this back into treasury shares and distribute back to shareholders sometime in the future.

3. Like cash dividend, if they distribute as share dividend, share price also will be adjusted downward of equivalent amount. But if the company is buying at rock bottom price and distribute it, when sentiment is turning the corner, the rate of return is fantastic. Point #4 to follow.

4. For argument sake, when they distributed this share at 0.82/share in early 2023 and you can sell it in the market for RM 1.41 as of last Friday, this is a tidy profit of 72%.....the return will be far higher than ROE.

Conclusion: if managed it right, this is one of ways to enhanced shareholders' value.

You may see some of the data that I extracted from Bursa Malaysia website. Some day share buy back can be as low as 1,000 shares when trading volume is very thin but there are small guys want to sell and exaggerated price drop downwards.

YTL
Date *******Average buying price***Qty**** Amount paid
27/6/2022***** 0.61*****1000****** 605
26-Nov-21**** 0.60***** 1000****** 595
1-Jun-21******* 0.68*****1000***** 675
11/1/2021-18/1/2021**** 0.71**** 16,500,000***** 11,701,877
30~31/12/2021***** 0.77*****4,000,000****** 3,087,245
21~23/12/2020***** 0.78*****8,000,000****** 6,233,483
18/12/2020***** 0.80****6,000,000****** 4,793,488
22/12/2020**** 0.77*****3,000,000****** 2,298,808
21/12/2020**** 0.79*****3,000,000****** 2,382,038
18/12/2020**** 0.80*****6,000,000****** 4,793,488
9-11/12/2020******* 0.72*****5,698,100***** 4,110,713
27-Nov-20***** 0.69****1,000****** 694
22-Jun-20***** 0.86***** 1,000***** 859
29-Jan-20***** 0.94***** 100,000******** 94,267
20-23/1/2020******* 0.99*****1,943,200****** 1,922,151
17-Jan-20***** 0.98***** 500,000******** 491,905
16-Jan-20***** 0.98***** 500,000***** 489,397
14-Jan-20***** 0.99***** 500,000**** 496,923
6-10/1/2020**** 0.96****2,000,000****1,924,393
13-Jan-20***** 1.00***** 500,000*** 501,940
30/12/2019~3/1/2020**** 0.96****16,008,100***** 15,435,563

Average buying price*** 0.82*** 74,254,400**** 60,761,104

@dumbMoney - Impressive school - University of Chicago Booth School of business. 😂😂

Chicago is a damn cold place....how many years were you there?

Yup - probably the findings that these experts have considered should be communicated to shareholders. 101 Stakeholders engagement. If they have presented the alternatives considered such as cash dividend, share dividend, share buy back, etc... Better informed shareholders will have better buy in and hold on to their investment not quit silently.... Beside selection bias, confirmation bias also should be eliminated.

The fund manager is probably feel if it is coming from his mouth, it's not partial or not-independent.....trying to get an expert to say it. The crux of the issue I feel is his credibility is chipping away....and he should return to his root as a stock picker. He has been setting up too many funds for his business expansion. And not to mention wasted all the time chasing a ghost that doesn't exist, discussing lawsuits.

@dumbMoney - I was not trying to mock Morgan Stanley or Goldman Sachs....but the point was they are expensive....why go through all the troubles to do MRI scanning, full blood test, ECG test running around the town trying to get the best doctor, when the symptom is only a small flu....take 2 Panadols and have a good sleep.

This is my personal experience about how my expectations translate into what I am willing to pay when there are discounts or premiums....I have been there for both periods.😂😂

I emerged buy some small quantities when I see the discounts is getting ridiculous at 40% but dare not swing as big as in the past as my confidence is not that great....it's okay to play small small la

The lost decade for iCapital

At hindsight, I feel it was pure luck that I didn't continue to hang on to it for the past many years.

His NAV at highlight continued to climb impressively but share price was bad....and discounts are getting worst

I finally sold my investments in year 2011...during PIIGS time frame....also that was the time the rate of NAV growth has slowed down and I started to feel it's time to move on to other investments

Then shits hit the fan.....we had financial Pearl Habour...I didn't bailed out...but stopped buying till mid 2008....and double down and keep buying till 2010

I made my first investment on 3/3/2006 around $ 1.17 and keep topping up regularly till year 2007.

I was willing to pay for premiums...you know, at time, many of self taught investors like me baptized with Buffett investment philosophy....it's okay to pay for a premium for a good company or fund manager

Based on his track records of low risk high return of which I truly believed at that time...

Like many other small investors......I was thrilled that he finally made his fund to the rest of us....

At least he survived Asian Financial Crisis and Dot.Com bubble

At that time, I saw the fund manager is someone can walked on water.....when comes to investment.....I can't exactly but his investment return of CDAM fund performance was really fantastics...
Year ** YoY returns
1998 + 20%
1999 57%
2000 1%
2001 8.7%
2002 12.7%
2003 39.7%
2004 16.2%

Prior to iCap launched, the fund manager is managing fund for private investor and it's not available to small retail investors. I will probably take many back right to Asian Financial Crisis.....

Let me share my own experience on my personal investment in iCAP.....way back to 19 years ago....Oops probably you will know I am not young anymore....

I have my own theory of premium/discount from psychology point of view, EXPECTATIONS, the expectations of growth prospect of a company and cost of capital.....but let's put aside the cost of capital as aside today....such as CAPM, risk free, etc. ...In English, an investor is willing pay for high Price Earning Multiple for example is due the company has demonstrated high growth in the past and investor will project high growth in the future indefinitely...when the growth is fall short, darlings turn into fallen angels, we will see PE multiples will collapse rapidly. Say 50 times PE ratio will collapse quickly to mid or even single digit.

They are trying to borrow some credibility by using UTS of which top 90 in QS World University Rankings 2024, is it necessarily? Thank God it's only university not Morgan Stanley or Goldman Sachs..🤡

If I’m COL, I want to proof a point. Since the fund manager said they have done the wonderful promotions with all kinds of roadshows, there should be shareowners stepping in now, with 30% discount to NAV.

Ever since they announced the innovative dividend policy and reminding COL not to buy, the share price keeps dropping, like a falling hot knife cutting through a butter. Oh perhaps, they will say correction is normal since it’s overbought…. well, we shall wait and see what will happen when it’s oversold(soon).

Or perhaps, easiest explanation later, damn COL is causing troubles again…. COL will be the sacrificial lamb lagi!

Thanks. Understood. Learn so much......I am pretty sure to many, are still weighing the probabilities, the chance of COL become a white knight is dead or alive. Some thought COL is checkmated with the 20% foreign ownership.
Now it also becomes clearer to me why the fund manager is getting paranoid. They possibly think, in the unlikely event of MGO, the minority of shareholders will receive the short end of the stick. This can be also a political capital to talk about.

I will leave that to other to imagine......not sexy, if there is nothing left for imagination. TGIF🍻

@dumbMoney. The 33% parties in concert rule will be triggered if COL as a fund manager with multiple funds, hypothetically, exceeded the 33% ownership? Falls under a number of shareholders acting in concert? Kam siah😁😁

To all - - apologise for all the typos and sometimes missing words, hard for me to do proof readings in a small tiny comment window. Cheers

@dumbMoney. Yesterday conversation on 20% foreign owneship limit is a non event to me... from law point of view. Next is 33% concert parties.. Care to elaborate? What is rule and it's implications?

@dumbMoney. Yes.. Re enlarged ownership only 2.3% with 10% buyback that's why I softened my view. It's doesn't affect me at all but for the benefits of other readers that may not understand this impact, the clarification will help them a lot.

I see....no wonder the irresistible force met with big batu.....they will automatically feel defensive as they perceived as a threat as if they get questioned why they got paid full NAV while not fixing the discounts...

Fixing discounts is not easy....it's involved technical and emotional aspects. Sharebuy back is one way, as I put forth the other issue of COL ownership will be enlarged....but somewhere you made a comment that we may not need to do full blown buy back just some small % like 10% may be enough to fix the discounts. The other part of discounts is old friends fear and greed in play.

I understand better now, COL model is to find big discounts in closed end funds, fix the discounts and move on next projects. Unfortunately it was misunderstood . COL was projected as a villain or corporate raider. Or may be lack of scientific explanation - pure birth dates bo ngam😂😂

I have opened up my kimono now...usually left with not much imagination is not so sexy anymore

There is also something about his concentration strategy, good point of this strategy, when he gets 1 home run, it will pay for his dogs in the portfolio. Only people that really know what they are doing this can deliver long term results. I saw people rant about his Boustead pick....one of his dogs but he has Petronas Dagangan, F & N, Padini, SEM etc....enough to offset those dogs.

For me, TTB is not bad or at least he understands it is so much easier to lose money than make money. From money management point of view is quite conservative. He is someone who dares to make a big swing when something is selling at ridiculous price. A few of his winners are also nicely picked on growth story. He held on to winners as long as he can but his strength also become his weakness, he held on to losses(from price point of view) way too long such Parkson. He wins more than his losses.

buying something cheap may remains cheap....value trap. There is something deeper than than I believe....

dumbMoney - thank you for correcting me.....it's on prosecutor.... the accused is already kesian enough. Paiseh....

Now back to two important questions : what COL knows that the rest of us don't know? What potential COL saw when they took such a big position?

I will not feel aggrieved that someone buy above 20%....perhaps most of the shareholders only listen to 1 side of the story and also putting the seed of fear COL will liquidate the fund. I have not seen COL sold a single share during such a poor showing of NAV. We even have people started to work out the performance themselves in the last few days in this forum. They convinced what is cause the discount....it means losing faith in the fund manager....they vote with their wallet despite of knowing they are selling at a huge discounts.

Agreed - good enough for me on the balance of probabilities and not beyond reasonable doubt, unlike in the criminal case. And also, burden of proof on civil case is on the plaintiff(iCAP), unlike criminal case the burden of proof is on the defendant. I bet on COL. Just to make things clear, I am no lawyers but just happened to read a few novels by John Grisham..😂😂

Thanks for the explanations on the definition because I was confused that whenever there were changes of shares, the put that in the bucket of indirect interest. Now all the dots got connected with your second part of the explanations. So just ignore all the announcement. It's just distractions.

Anyway - I have learnt a hard lesson too that litigations only make lawyers rich. Hostile take over is expensive. Settle disagreements by shaking hands quickly. Let's focus on business. Grow the NAV.....if today NAV is $50 ...all will be the winners regardless of big or small shareholders.

Also definition of a single shareholder.....they may be pushing a wet string trying to proof multiple shareholders is actually the same shareholder......conspiracy theory argument? Aiya.....I wish to tail along since I got no many things to do.....more exciting that watch dramas.

I got it now --- iCap make such announcements were just a psychological warfare confusing people like me....😫😫Mum somebody bullies me.

I know that the house will win even 1% edge will make a lot of money.....51% on the house 49% on players.

dumbMoney - between COL and iCap who is the house?

At the point of IPO,I don't think they have thought out this scenario of either foreign investor or local investor can be a major controlling investor. Now that they have learn this lesson, they could have retreat and employing lawyers to beef up their positions.

I will hantam kuat kuat and if I am COL, I will keep buying till it cross 25% then no way they can amend their constitutions to their advantage(if by law 75% shareholders approval is required for constitutions amendment).

Sorry...I missed out that you have read their constitutions 3 times, I thought you read Patient Investor post 3 times🙄. And you now said you can't find that....then that guy is naked la....no need to wait for the tides to recede. 🤗🤗

Yup - it's well possible that they may just use what they can find from SICDA and it is not written in their constitutions. But SICDA is passing back the bucks to the company by saying to enforce it that will depend on what is written in the constitutions. I am pretty sure they will guard that constitutions now very tightly and nobody has seen it. It's okay to let them hide in the dark...if they don't have it and nobody entertains them......it is just all barks.....just playing poker and calling the bluffs. I will wait it out and see when the tides recede, is the guy naked. 🤣🤣

Or COL can do an outright purchase another few more % to kill the whole thing....👻👻

Re SICDA posted by Patient Investor & dumbMoney - looks like at hindsight iCap made a mistake for not defining the rule clearly, they may need to do amendment. Amendment will be a messy thing and will require very high percentage approval from shareholders....I am not sure of the %....2/3 majority or 75%....???

Out of my competency on company law, found a reference for comment

https://dnh.com.my/the-importance-of-a-company-constitution-in-malaysia/

If it's really true 75%, just a few % from minority shareholders + COL 23% already can easily blocking it. 😉

Haha.....SmartMoney?😱😱 Hat too big....head too small.....almost empty inside too....worried get suffocated. Leave that to TTB if he would like to join us in this forum....he will know we all are nice guys after a few rounds of sparing. 🍻