In last year’s annual report, I wrote about Scottish Mortgage (SMT), an investment trust or a closed-end fund listed on the London Stock Exchange and a constituent of the FTSE 100 Index.

For some investors who kept asking about the NAV discount of icapital.biz Berhad and whether your Fund has an expiry date, SMT offers plenty of lessons to learn from.

SMT was launched in 1909, about 113 years ago and is still going strong with total assets of US$11.36 billion (icapital.biz Berhad is only 16 years young). It once traded at a persistent discount to its NAV.

After around twenty years, its NAV discount disappeared in 2013, endowing
its share price with a premium to NAV before trading around parity.

After I wrote about SMT in the said annual report, some uninformed investors, especially those from overseas, say that icapital.biz Berhd should follow SMT by buying back its own shares.

Was the discount narrowing of SMT due to its share buyback and/or dividend payment ? The simple answer is no.

The move from discount to premium was primarily driven by increased demand from retail investors and an evolving ownership.

For decades, a significant portion of SMT was owned by institutional investors, mainly UK pension schemes. By the end of the last century, these investors had become disengaged with the investment trust structure as new open-ended pooled vehicles allowed greater operational efficiencies.

They were persistent sellers which drove the share price to a persistent discount to NAV. From 2010, SMT was more proactively marketed to retail investors, who in the UK had begun taking greater control over their own finances, via savings platforms.

Consequently, the SMT shares owned by institutions declined substantially, from 54% in 1994 to only 17% in 2021. At the same time, share ownership by individuals jumped.

It was the massive increase in ownership by individual investors that essentially removed the NAV discount of SMT.

Shareholders, existing and future ones, ultimately bear the responsibility of determining the market price of a listed company. So, the type and quality of shareholders matter.


i Capital.biz Berhad 2022 Annual Report

Once again, despite a very tough and rough environment, icapital.biz Berhad has achieved a superior NAV and share price returns of 19.60% and 7.71% respectively for the two years ended 30 September 2022.

Both have strongly outperformed the 12.77% plunge in the bellwether MSCI Malaysia index. Remember, icapital.biz Berhad is ideal for investors looking for a low-risk, high-return fund.

With over RM150 million still in cash reserves and Capital Dynamics’ time-proven value investing philosophy, it is an excellent time to invest more in icapital.biz Berhad.

This year, the highly popular and productive Investor Day will be back. It will be held on Saturday, 26th and Sunday, 27th November at the KL Convention Centre. Learn for yourself why icapital.biz Berhad works.

Finally, let me repeat what I think is a very important point to my fellow Malaysian shareowners - do not let any investor who refuses to think and act like a share owner destroy a precious gem like your Fund.

Do participate in its coming Annual General Meeting and make your ownership counts. It can help narrow the NAV discount.

i Capital.biz Berhad 1Q2023 Report

Last year’s AGM was held on 20th November 2021. In the question and answer session, I spent quite a fair bit of time explaining why share buyback does not and will not work for icapital.biz Berhad.

Let me update our share owners on this unproductive matter.


I used the example of Top Glove’s loss-making share buyback in last year’s AGM. On 19 November 2021, its closing price was RM2.31. On 30 November 2021, it closed at RM2.92. On 15 September 2022, Top Glove’s share price closed at RM0.765.

In short, since then, Top Glove’s share price has collapsed a further 67% and 74% respectively.

A share buyback of RM1.0 billion by Top Glove, for example, would have seen a further massive loss of RM670 million or RM740 million. In April 2022, Starbucks, the world’s leading coffee chain, suspended its share buyback program as Howard Schultz takes command again.

Schultz explained that the share buyback programme is suspended so that Starbucks can “invest more profit into our people and our stores.” Starbucks like Amazon.com and Apple Inc has seen a rising worker rights campaign that has seen many of their store workers voting to unionize.

In short, share buyback is destroying Starbucks in the long-term.


i Capital.biz Berhad 2022 Annual Report

An investor needs to match his or her own investment objective with the investment product before investing.

As Tan Teng Boo explained, to understand icapital.biz Berhad better and see if it is suitable for your investment needs, think of two types of properties: Property A as an empty land and Property B as a shop house.

Question: which type of property is suitable for your investment needs? If you are looking at an investment that can provide you with regular income, obviously buying a shop house with rental would be the most suitable.

If you are looking for an investment that offers high long-term capital appreciation, buying a piece of land would be far superior. In Malaysia, just think of the property tycoons that bought empty pieces of land 40 or 50 years ago in places like Bangsar, Bandar Utama, Subang Jaya, etc. and sat on them and let the land appreciate in value.

Investing in icapital.biz Berhad is like buying such a piece of empty land. icapital.biz Berhad calls its investors "share owners" instead of "shareholders".

icapital.biz Berhad is certainly meant for the serious long-term investors,
people who want to be able to sleep soundly at night and then wake up later to see their asset value has appreciated substantially.


i Capital Newsletter Volume 30 Issue 1

The intellectual approach towards investing in the stock market differs greatly between those who time the market or stocks and those who practise value investing.

For the former, the market index or stock price is just a number to predict, making it in essence similar to gambling or speculating; for the latter, the market index is meaningless and irrelevant while the stock prices are to be used only in comparisons with the intrinsic value of a stock or business.


i Capital Newsletter Volume 31 Issue 36

Many investors and investment analysts have failed to understand that icapital.biz Berhad is ideal for investors looking for a low-risk, high-return Malaysia focused fund.

icapital.biz Berhad's strong performance is not a fluke shot and its consistency is but the logical result of its fund manager's Bamboo value investing philosophy.

Developed by Tan Teng Boo, this eclectic investing style has proven itself time and again throughout a variety of financial market and economic conditions, including the 2020 pandemic recession and our current bear market.

i Capital Newsletter Volume 33 Issue 36

Barring unforeseen circumstances, the odds favour the NAV of icapital.biz Bhd exceeding RM1 bln or RM7.14 per share.

icapital.biz Bhd is easily the most undervalued company on Bursa Malaysia and remains a misunderstood company; such a combination smells of a unique investment opportunity.

This is without taking into account the future strong increase in NAV.

In a world filled with uncertainty, icapital.biz Bhd represents a solid long-term investment.

If a subscriber starts with only RM500, and makes a monthly regular investment of RM500 and icapital.biz Bhd generates a return of only 8% per annum, the subscriber would have a total of RM251,278 in 224 months (18 years and 8 months).

If the return rises to 15% per annum, well, the end result will be much higher.


i Capital Newsletter Volume 33 Issue 7

Capital Dynamics did not get to be Asia's first global investment firm without good reasons. As an independent investment firm with no ties to the large investment banks or stockbrokers or political organisations, Capital Dynamics has no choice but to rely on its own brain power and internal resources to survive and succeed.

Capital Dynamics just has to be damn good in what it does.

Or else Capital Dynamics would not have been able to be around since 1989 in one of the toughest industries there is. And damn good Capital Dynamics has been, since 1989.

It is not just the deeply respected weekly i Capital (or www.icapital.biz) but also in the local and global funds that Capital Dynamics manages (bear in mind that Capital Dynamics does not have any agents selling its funds or its weekly i Capital) and the way Capital Dynamics has stubbornly stuck to its integrity principle.

Capital Dynamics has been damn good since 1989 because of one very good reason.

Tan Teng Boo, its CEO, makes sure that Capital Dynamics conducts solid, comprehensive primary research (not secondary research) and as a consequence, consistently produces world-class analysis on a wide range of subjects, which then enables Capital Dynamics to make far-sighted, wise investment decisions.



i Capital Newsletter Volume 33 Issue 40

The performance of icapital.biz Berhad has been outstanding, not just in terms of its NAV but also its share price over many years. Whether it is low inflation or high inflation, whether it is rising or falling interest rate, icapital.biz Berhad has consistently delivered superior returns to its shareowners and is still boasting of a substantial cash-laden war chest.

Let me recapitulate a fundamentally important point. A well-managed closed-end fund like icapital.biz Berhad is an excellent investment product for individual investors, especially during tumultuous times like now.

However, after so many decades, there is sadly still only one closed-end fund listed on Bursa Malaysia. The world-class London, Sydney and New York stock exchanges abound with hundreds of closed-end funds. Their investors have so many choices in terms of investment products.

Let me repeat what I think is a very important point to my fellow Malaysian shareowners - do not let any investor who refuses to think and act like a share owner destroy such a precious gem. It is indeed strange that the more a large foreign shareholder accumulates the shares of your Fund, the wider the discount becomes and persisted.

When your Fund was trading at a premium for many years, there was no such large foreign shareholder present. One does not need the IQ of Einstein to put two and two together. This is just my simple-minded observation.


icapital.biz Berhad 4Q22 report – commentary by fund manager