@Nepo Sam is trading at PER 50+, KGB at 60+. Prime examples of value investing?

@Tcs Tan You mean WB's $100K annual salary compared to TTB's millions in fees?

COL want to bet heavily, but TTB says No!

TTB sold his shares on the 13th of this month, and announced it on the 15th, then on 17th, the company applied for an interim injunction against further buying by COL. On the 19th, court grants the interim injunction, which means no further buying by COL for the time being, and the possible impact on the market price. Coincidental timing for the sale?

The previous ex-dividend share price on 17/9/2013 was $2.32. The cum dividend price on 16/12/2021 was $2.34. So the mark to market gains for shareholders for the past 8 years and 3 months is a miserable 2 sen. The NAV for the two dates are $2.92 and $3.64 respectively, for a rough average of $3.28 . The management fee at 1.5% of this amount for 8.25 years = 40.59 sen, or more than 20 times the nominal returns of the shareholders. Think above it,

The price discount is a reflection of the trust deficit. The timing of the buy just before the AGM is suspicious!

If there has been a mistake, would have been corrected by now.

@vnman53 read these for yourself https://www.bursamalaysia.com/market_information/announcements/company_announcement?keyword=&cat=DRCO&sub_type=&company=5108&mkt=&alph=&sec=&subsec=&dt_ht=&dt_lt=

@Nepo After TTB bought, the share price was under water until COL came in to buy and pushed up the price, so he quickly unloaded to avoid further losses. Talk about long term share ownership!

TTB announced and made a token purchase of the company's shares just before the AGM at a price of 2.38 and now turned around and sold it at $2.40, which hardly covered trading costs. Is that a head fake to impress shareholders of his confidence in the company before the AGM? With all the millions in fees collected, cannot just hold on to them a bit longer while COL is continuing buying?

Basically, the cash is not 'share owner's money, with the fund manager getting the first bite off the interest, leaving just the crumbs for the former.

@calvintaneng You need to net off the 1.5% management fee and tax payable on the interest income to arrive at the net returns, if any..

This is the list of 30 largest shareholders of Amanah Small Cap Fund just before its voluntary liquidation; Once the funds smell blood in the water, they will come circling. 30 LARGEST ACCOUNT HOLDERS
Name of shareholders Shareholdings %
1. Permodalan Nasional Berhad 86,500,000 17.30
2. Citigroup Nominees (Asing) Sdn. Bhd.
[Exempt An For Mellon Bank (Mellon)] 81,095,200 16.22
3. HSBC Nominees (Asing) Sdn. Bhd.
[Exempt An For Royal Bank of Canada (Channel Islands) Limited] 33,034,500 6.61
4. Cartaban Nominees (Asing) Sdn. Bhd.
[Credit Suisse Securities (Europe) Limited for LP Value Limited] 23,522,710 4.70
5. Citigroup Nominees (Asing) Sdn Bhd
[Bear Stearns Securities Corp for the Carrousel Fund Limited] 20,886,900 4.18
6. Employees Provident Fund Board 19,553,280 3.91
7. Cartaban Nominees (Asing) Sdn. Bhd.
[Credit Suisse Securities (Europe) Limited for Value Catalyst Fund Ltd.] 19,432,234 3.89
8. Citigroup Nominees (Asing) Sdn. Bhd.
[Bear Stearns Securities Corp For Bear Stearns International Limited] 18,820,700 3.76 9. Cartaban Nominees (Asing) Sdn Bhd
[Credit Suisse Securities (Europe) Limited for Laxey Investors LP] 13,898,210 2.78
10. Cartaban Nominees (Asing) Sdn Bhd
[Credit Suisse Securities (Europe) Limited for National Bank of Canada] 10,231,646 2.05
11. Cartaban Nominees (Asing) Sdn Bhd
[Credit Suisse Securities (Europe) Limited for LP Alternative L.P.] 9,778,200 1.96
12. Citigroup Nominees (Asing) Sdn. Bhd.
Exempt An For Mellon Bank (ABNAMRO Mellon) 9,275,200 1.86
13. Mayban Nominees (Asing) Sdn. Bhd.
[OBS Bank for Lilaram Bharvani Rajan] 7,856,600 1.57
14. Cartaban Nominees (Asing) Sdn. Bhd.
[SSBT Fund SD89 For Government of the Province of Alberta] 7,184,400 1.44
15. DB (Malaysia) Nominees (Asing) Sdn. Bhd.
[Deutsche Bank AG London for QVT Fund LP] 7,176,785 1.44
16. Cartaban Nominees (Asing) Sdn Bhd
[Credit Suisse Securities (Europe) Limited for Laxey Universal Value LP] 6,884,080 1.38
17. Tay Kia Hong & Sons Sdn. Bhd. 6,000,000 1.20
18. HSBC Nominees (Asing) Sdn. Bhd.
[Exempt An For Credit Suisse (SG BR-TST-Asing)] 5,267,000 1.05
19. Cartaban Nominees (Asing) Sdn. Bhd.
[Exempt An For Bank Sarasin-Rabo (Asia) Limited) (AC Client Frgn)] 4,383,800 0.88
20. Tokio Marine Insurans (Malaysia) Berhad 4,088,000 0.82
21. Daiman Development Berhad 4,000,000 0.80
22. Citigroup Nominees (Asing) Sdn. Bhd.
[Bear Stearns Securities Corp For the Carrousel Fund II Limited] 3,723,600 0.74
23. Cartaban Nominees (Asing) Sdn. Bhd.
[Credit Suisse Securities (Europe) Limited for Leaf Limited] 3,446,520 0.69
24. CIMB Investment Bank Berhad
[Exempt An CLR For Kumpulan Wang Amanah Pencen] 2,000,000 0.40
25. Cimsec Nominees (Tempatan) Sdn. Bhd.
[CIMB For Siew Mun Chuang (PB)] 1,730,800 0.35
26. OSK Nominees (Tempatan) Sdn. Bhd.
[Pledged Securities Account for Lo Kok Kee] 1,400,000 0.2 27. Cartaban Nominees (Asing) Sdn. Bhd.
[Credit Suisse Securities (Europe) Limited for Metage Special
Emerging Markets Fund] 1,145,000 0.23
28. Citigroup Nominees (Asing) Sdn. Bhd.
[CGML IPB For Brookdale ITL Partners] 1,003,580 0.20
29. Aseambankers Malaysia Berhad
[CLR (C ) For Kumpulan Wang Amanah Pencen] 1,000,000 0.20
30. RHB Capital Nominees (Tempatan) Sdn. Bhd.
[Pledged Securities Account For Hiew Kat Kee) 919,800 0.18
415,238,745 83.0

Judging from the voting results at the recent AGM, COL only needs another 10% shares to be a serious threat to management, and short of a court injunction, the way is clear for them to do that now after the court threw out the judicial review application. Once institutional investors can see the distinct possibility of a liquidation, they will pile in to do risk arbitrage and the tide will turn because of their buying power. The question to ask is, why are so called long term investors selling out at this price to COL?

COL is still collecting cheap shares at this level, so is in no hurry to push up the share price, as it can continue to collect up to 33% before the mandatory takeover is triggered for parties acting in concert. Even then, it is only at the highest price it paid during the last 6 months, so why should they make things expensive for themselves. The proper takeover defence is to buy back shares in the market to raise the price and make it expensive for COL to build up its position for a possible takeover. So don't expect any share price support from COL and dont't blame them for the low shar price because it is in their interest, which is not to profit from just the share price, but the ultimate liquidation of the company to realise fulll value..

WB is first and foremost, the major shareholder of BH, so he is on the same page as both the CEO and shareowner, whereas TTB is more a hire hand positioned as the CEO than as a shareowner, so there is a conflict of interest between the two positions.

@RealValueInvestor - correction, the Real Warren Buffet .......while ICAP's wannabe, not equivalent........Equivalent would put him in the same league!

@freedomfund, please check your I3 Messenger app for message.

Sorry, typo in the above AHP2 price/book rato. It should be 0.57 instead of 0.51.

For comparison, when the only other listed closed end fund Amanah Millenia Fund went into voluntary liquidation, the NAV was 1.156 against a share price of $0.885, a price/book ratio of 0.77.Its shareholders have a much lower pain threshold. When property trust AHP2 went into voluntary liquidation, its last published NAV was $0.8888 against market price of around 0.51, a price/book ratio of only 0.51. Because its properties got a better realised price when finally sold, the total distribution was around $1, so investors doubled their money with the move.

@observatory There is a 10% limit to share buyback per year. No doubt the theoretical ex-price after the 20 sen dividend is going to be 20 sen lower, but this implies a further share price discount to NAV. Based on current price of 2.45 against 3.76 NAV, the price/book ratio is 0.65 cum dividend . Applying the same ratio to the ex-dividend NAV of 3.56 will give a price of 2.31, not 2.25, i.e. if the returned cash is no longer subject to the discount, At 2.25 ex-dividend, the price/book ratio drops further to 0.63, which is counter-intuitive, i.e. paying a dividend will widen the discount further.

@Thirai - It is no free lunch or early Xmas. You are only getting back your own cash that will no longer suffer the price discount or having to pay management fee.

Shareholders should ask, is further legal action against COL a BOD decision or TTB's? If the SC has ruled that COL is not in violation of the 20% limit rule, is the company suing SC as well as defendant, as SC is the regulator and enforcer of the rules?

If the company deemed it important enough to announce the initiation of the judicial review, then it should also be important enough to announce the outcome. Look at Serba Dynamics.

@observatory - Holding back material information is breach of listing rules, especially when litigation against the largest investor group is price sensitive.

Or just do a share buyback. Instead of money in FD which barely covers the management fee, can capture the price discount immediately. A no brainer.

One obvious reason why TTB is so strongly against company doing a share buy back while he himself is buying is the reduction in management fees payable. A less obvious one is any reduction in number of shares outstanding will effectively increase the percentage shareholding of COL, for which TTB is going to court to try to block. Once past 25%, COL will be in a position to block any special resolutions, i.e. veto power.

Bravo! You really torn apart the fake statistics of TTB. Not many people would want to spend this amount of time to debunk his claims. The mere fact that he has refused to acknowledge the dividend returns of the index when making his comparisons already showed how transparent he is.

You have done lots of research for your blog.The usual way to compute returns of stocks or funds is to assume reinvestment of dividends, instead of just adding back the dividends to the NAV, because over time, there is no compounding effect for this cash. My alma mater University of Chicago was the first one to compile the complete database of historical stock returns at the Center for Research on Security Prices, and this is the way dividends and share issues are adjusted. iCap has not been honest in comparing performance against the KLCI because the latter ignores dividend returns, which at say 3% a year, can be very significant over the years. However, there is no easily total market total returns database for Malaysian stocks, which makes historical comparison difficult.

Just buying back own shares at around $2 would have made at least 20%, easiest trade in the books.

The price discount is a trust deficit, reflection on the manager.

Until such time that the fund can be liquidated at NAV, shareholder returns should only be based on the share price, as this is all that he will get at exit all these years.

How can persistent buying of a share by an institutional investor causes the price discount to widen instead of narrowing? With the same logic, if the same investor starts selling down, the price discount should go down, i.e. the share price goes up? Assuming no change in NAV, price discount and price move in opposite directions. So buying causes price to go down, and selling causes price to go up! Unbelievable logic.

Compared against some other Asian equity CEF, iCap is the champion discounter https://www.dropbox.com/s/x1idba709w9zukr/Closed-End%20Fund%20Screener%20-%20CEF%20Connect%20-%20Brought%20to%20you%20by%20Nuveen%20Closed-End%20Funds.pdf?dl=0

Kellington has an ex-bonus TTM PER of 46 and a P/B ratio of 6.5. For this to be a value stock, it better go up by at least $1 soon.

When a deal is too good to be true, it usually is. So the company is trying to buy a block of Turiya shares cheap from the financier of the shares, and is now sued by the borrower and original owner of the shares. This may drag on for a while depending on the outcomes of the court case and or appeals.

Another company sitting on huge cash pile, not paying dividend and trading at great discount to net asset is iCapital. Similiarity with MAA? Trust deficit.

Buying only after the market has recovered is not value investing. It is FOMO, Fear of Missing Out.

The company, or rather, the fund manager, wants to prevent the biggest shareholder from buying more shares. If the latter were to turn seller, who is going to support the share price?

As per the quarterly report, NAV went up by 12 sen, share price dropped by 12 sen, go figure!.

If shareholders cannot even reverse a simple transaction as the reimbursement of dual listing expenses, how to wind up the company, which requires a special resolution and 75% majority votes? In case you are not aware, COL is not an activist fund, so can forget about them taking the lead.

Why should iCapital share price go up when it can't even beat the KLCI's 2.4% gain last year before counting dividend yield of the index stocks?

@Nepo Here's the maths. If company buys back 10% shares at market price of 2.22 versus NAV of 3.10, shareholders make 40% on the repurchase if shares are cancelled. But TTB loses 10% of his fee income!

@Evelyn11 Get the company to disclose Sc's ruling on the matter so everyone is aware what the dispute is about.

Looks like some of the directors would rather resign quietly than to voice dissent against TTB, who 'appointed' them. The only time outside directors were nominated was in 2012 and we all know the voting results.

On the judicial review of COL's position, the company's annual reports clearly stated the beneficial owners of the shares collectively managed by COL. There is no hiding of ownership by COL through nominees and prima facie, there is no breach and the SC would have ruled as such, based on the ownership list. The claim that COL owned the shares through nominees is not true. COL is reporting the total holdings as per the parties in concert rule, so the public is aware of its share transactions at any one time once it reached the significant shareholder reporting threshold. The SC's 20% individual shareholding limit does not prohibit parties acting in concert holding more than 20%, with the only requirement that once it reaches 33%, they must make a MGO for the remaining shares.

The 20 largest shareholders list as per 2020 annual report
1. Chong Ah Him @ Chong Kum Kwan 5,321,000 3.801%
2. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Emerging Markets Country Fund 4,891,200 3.494%
3. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Emerging Bmi Markets Countryfund 4,292,200 3.066%
4. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Global Emerging Markets Fund 3,555,500 2.540%
5. Tunku Sara Binti Tunku Ahmad Yahaya 2,800,000 2.000
6. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For The World Markets Umbrella Fund Plc 2,670,500 1.908%
7. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Emerging Markets Global Fund 2,645,100 1.889%
8. Maybank Nominees (Tempatan) Sdn Bhd
Yeoh Ah Tu 2,419,400 1.728%
9. Annhow Holdings Sdn Bhd 2,000,000 1.429%
10. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Emerging Markets Investable Fund 1,892,000 1.351%
11. Lam Fook Shin 1,832,200 1.309%
12. Cartaban Nominees (Asing) Sdn Bhd
Exempt An For Rbc Investor Services Trust (Clients Account) 1,761,400 1.258%
13. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For School Employees Retirement System Of Ohio 1,648,100 1.177
14. Loh Kian Chong 1,445,000 1.032%
15. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Emerging Markets Free Fund 1,423,200 1.017%
16. Ang Seng Chin 1,400,000 1.000%
17. Ocuvas Sdn.bhd. 1,370,000 0.979
18. Leow Kok Meow & Sons Sendirian Berhad 1,250,000 0.893%
19. Heng Kim Siang 1,238,100 0.884%
20. DB (Malaysia) Nominee (Asing) Sdn Bhd
The Bank Of New York Mellon For Cornell University 1,221,400 0.872%

Where is City of London's 20+%?

One of the common criticisms against the Singapore CEF's were their relationships with the parent banks. They used their own banks for their broking and banking transactions, and invested substantial portions of the portfolio in related companies, and the boards were dominated by senior officers of the banks. There was little independence to speak of.

As mentioned earlier, there were 4 listed closed end funds managed by the Big 4 Banks in Singapore. All of them went into members’ voluntary liquidation some years back because of persistent price discount to NAV. Even though the Banks will no longer collect management fees upon liquidation, they were also major shareholders of the funds and the gains from liquidation outweighed the former by far.
This is what Harimau Investments Ltd, managed by OCBC, posted as the rationale for the move – “The Board of Directors of Harimau Investments Limited (“Harimau” or “Company”) is pleased to announce a proposed restructuring (the “Restructuring”) of Harimau to unlock value for our shareholders. The proposed Restructuring will involve (1) the voluntary liquidation of Harimau and (2) the return of cash to our shareholders.

Rationale for the Restructuring We are a closed-end investment company. We invest in marketable securities for investment purposes. Our net asset value (“NAV”) is based on the market value of our investments. However, our share price for the last 5 years ended 30 November 2000 has persistently been trading at a significant discount to our NAV. Based on our month-end unaudited NAVs and our month-end share prices for the last 5-year period, our shares had traded at a discount ranging between 23% and 61% to our NAV per share. The last transacted price of our shares on 30 November 2000 was $1.55 as compared to our unaudited NAV per share of $2.04 as of the same day. This represented a discount of approximately 24%. The Restructuring will enable us to unlock value for our shareholders to be achieved through a cash distribution to shareholders derived from the orderly disposal of our investments.”

Can all the Singapore banks be wrong with their decisions to liquidate?

@fairplay You can always forward a copy of the constitution to cnman53 via the i3 Messenger app, which allows attachment of documents. This will saves him time and effort to chase down a copy himself, which the company is obviously making things difficult for him.