If the foreign funds have not been buying, ICap would have stuck in the price range of around $2.10 today. The price was not performing & not many people were interested in it. Just as Laxey put it in their letter to ICap shareholders: "The discount that the shares of the Company trade at relative to their NAV simply reflects the weak investor sentiment in the Company."

Their real intention is to liquidate the stock, not to become fund manager. They said in their letter, "Our Board should research the means to permanently remove the discount to NAV which our shares trade at, and bring forward proposals to enact those recommendation forthwith." What they are saying indirectly is that they will liquidate ICap.

Liquidation is fair for all shareholders since everybody get what they entitle to according to their shareholding! It is not just benefiting Laxey only! The only person loses out is the arrogant TTB!

That is not important. The most important thing is to maximize our profit by narrowing ICAP discount or even liquidate it!

In "Capital Dynamics gets SC nod for world’s first dual-listed fund":
"He said however that he could not disclose how the new dual-listed fund and icapital.biz would be linked."

I think the dual-listed fund should be a new fund, it will have to go through IPO process & you have to pay to subscribe it. I just can't figure out how the dual-listed fund can be linked to ICAP.

For Sep results, if improve quarter-on-quarter then it is a good sign - the worst may be over. For year-on-year, sure drop.

Yes, Laxey Partners, you have my support!

"It doesn't matter if a cat is black or white, so long as it catches mice." - Deng Xiaoping.

I posted my proxy form yesterday, voting for the 3 candidates from Laxey & voting against all the candidates from Capital Dynamic. :)

Hahaha, if the foreign funds sell, we still got hooi to use his simulated unlimited capital to buy all of them. :)

Hahaha, as I suspected, there are a lot of loyal supporters of Capital Dynamic. Maybe they are counting on this to maintain their control of the Board. However, be warned, the 2 foreign funds has total of 18.863 Million (13.5%) shares, if they are not happy, they may sell their shares & that would be a disaster!

In 2/11/12 announcement, ‘Annual Report 2012 – Addendum’ (http://www.bursamalaysia.com/market/listed-companies/company-announcements/1108845), ICap has received letters nominating Mr Andrew Pegge, Mr Lo Kok Kee & Mr Low Nyap Heng for election as Directors in AGM.

From the details, Andrew Pegge is a director of Laxey Partners Limited, one of the foreign fund that had bought 9.645M or 6.89% of ICap shares. The other 2 persons must be acting in concert with him since they are all nominated by the same person. The latest AGM resolutions have 9 persons contesting for maximum 7 director positions.

This is a first step taken by the foreign fund. Their intension is not clear. They may simply want to have more influence in the Board of Directors, or perhaps to push through some measures to reduce the discount. I believe their intension will be known after they get appointed as directors.

Now I understand why the shares price went up sharply on Friday, in a boardroom tussle like this, either party may buy more shares to increase their voting power! No wonder Capital Dynamic sending out emails asking subscribers to buy in order to have voting rights.

For those who receive the emails: Is Capital Dynamic asking you to vote for their choice of directors? I think better vote for the foreign fund’s choice since they may implement some measures to reduce the discount. (see my post on 29/8/12 12:53pm in this thread on ‘Managing discounts’).

kcchongnz, look like your wish may come true after all!

kcchongnz, if there is anything important, they would announce it in Bursa Announcement. They would not send email to 'selected shareholders' only. :)

LOL...

No idea, it could be anyone. Anyway the volume are small, could be just some small fish cutting loss.

If MSports founders acquire or dispose shares, they will have to report to Bursa in both 'changes in substantial shareholder interest' & 'Changes in Director's Interest' since they are both directors & substantial shareholders.

Today news in StarBiz titled 'China industrial output may be faster in fourth quarter vs third':
http://biz.thestar.com.my/services/printerfriendly.asp?file=/2012/10/25/business/20121025110817.asp&sec=business

Limited downside due to buying support of foreign fund, high dividend yield, potential capital gain, recent signs of China economy stabilizing, … hmm, sound like good time to bargain hunt / bottom fishing for long term investors! :)

Some recent news on China economy:
http://finance.fortune.cnn.com/2012/10/23/china-growth/

http://biz.thestar.com.my/services/printerfriendly.asp?file=/2012/10/18/business/20121018114846.asp&sec=business

Summary of foreign fund transactions in MSports:
{in brackets are announcement date, total & % shareholding, market low-high prices & total # lots. L=lot.}

(23/10/12) CIM Dividend Income Fund Limited: (26.9M shares, 5.2%)
Buy, 22/10/12, 317 L, ($0.32-0.325, 1118 L)
----------------------------------
(22/10/12) CIM Dividend Income Fund Limited: (26.9M shares, 5.19%)
Buy, 19/10/12, 975 L, ($0.315-0.33, 2675 L)
Buy, 18/10/12, 1900 L, ($0.31-0.325, 5568 L)
Buy, 17/10/12, 2186 L, ($0.30-0.31, 3377 L)
Buy, 16/10/12, 1500 L, ($0.30-0.305, 3960 L)
Buy, 15/10/12, 969 L, ($0.29-0.30, 4800 L)
Buy, 12/10/12, 2045 L, ($0.295-0.30, 7275 L)

This fund is buying quite aggressively recently, they must have a lot of confidence in MSports! Probably they have done a company/plant visit & interviewed the management & their analysis on the industry outlook & China economy is positive.

Should be good news but steel stocks mostly drop today! It could be either “Buy on rumors, sell on news” or simply not as good as expected.

I’m no sifu, just share my analysis on this stock.

From the announcement, the new substantial shareholder is CIM Dividend Income Fund Limited, British Virgin Islands. It is a foreign fund. Its last bought was 1,150 lots on 11/10/12 where market prices was $0.295-0.30. (unlike directors, substantial shareholders don’t have to report their transaction prices & we can only guess them from the market prices). It must be accumulating recently until it has >5% shares & become a substantial shareholder. However, we can’t guess its earlier buying prices since it doesn’t have to report those transactions before it becomes a substantial shareholder.

Since its name suggests that it is an Income Fund, it must be aiming for the dividends. This is logical since if MSports gives same dividends as last FY (3.11 sen net), the net dividend yield would be 10.4% (at $0.30). In addition, it has RM0.49 net cash as at Jun12. Funds usually has professionals to do research & analysis for them, if they have confidence with MSports, most likely MSports is worth buying.

However, there are still risks like whether MSports’ earning growth will resume to previous double digit rate, whether China economy will slowdown or even hard landing. Dividend is not guaranteed & it depends on the earnings of the company, if the company earnings weaken, it may not give good dividends.

We may need to watch closely whether this foreign fund continue to buy in the future. If so, then they have very high confidence & may worth following especially if the price drop below its buying prices.

Director, Lim Hong Thye, bought 50K shares at $1.42 on 11/9/12.

Director's buying/selling is more important than shares buy back since he is buying with his own money whereas shares buy back is using company money. A director is an insider, he may know somethings that we don't know. If a director is buying aggresively, he is having a lot of confidence in the company & may worth following.

However, this director only bought once then it was all shares buy back, so the confidence is not that high!

kcchongnz, ignore hooi, he is just a spammer pretending to buy/sell on every available prices.

chongkonghui, if there is a sell there must be a buy, otherwise how to match a transaction? :)

Icap is not suitable for trading, volume too low & price range too narrow. Even the 2 foreign funds bought only. It is more suitable for long term investors.

From my previous study on Icap quarterly reports, I found that it has kept a cash level of around 30 to 35% of its portfolio since May 2010 (from 13.3% in Feb10). Obviously, it has prepared for the worst but so far the worst didn't happen. However, if the worst do happen, its NAV won't drop that much & it can bargain hunt again in a bear market.

There is a saying: "No one can time the market", market is unpredictable & anything can happen.

Under the Single Tier tax system, companies pay out dividends from the profit after tax, so, whether they pay dividend or not, it is already taxed.

This is different from previous system where companies transfer their tax to shareholders in dividends & the shareholders may claim back the tax based on their taxable income levels. So, those shareholders with low taxable income actually gain more!

You can think of dividends as a kind of profit taking. Rather than buying & selling the stock to obtain capital gain, you get profit on dividends.

I think in a balance portfolio, you should have a mix of high dividend yield stocks, high growth stocks, under-valued stocks, cyclical stocks, etc.

My own experience in BjToto proved this point:

I accumulated most of my BjToto shares when it drop sharply in 2002 due to intercompany loan issue. After that I sold around 16% of it when its price rose & hold the rest until now.

So far I have received so much dividends & capital repayment that my net cost (total buy – total sell – total income) is already negative, i.e. I have recovered all my cost! It is now the largest shareholding & top performing stock in my portfolio!

I leave it ‘auto-pilot’ most of the time, don’t even bother to look at its price. Just shake legs & waiting for dividend cheques to arrive almost every quarters. Now with e-dividend, don’t even need to deposit the cheque :)

I agree with Fat Cat.

I think the reason why the price drop is due to worst than expected earnings in 2QFY12(Jun12). It still profitable but PAT drop 28.8% year-on-year & drop 3.2% quarter-on-quarter. Also due to worry of China hard landing. However, EPS(2Q12) is 3.11 sen & annualized to 12.44 sen & PER=2.4x(at RM0.30). Net cash is now RM0.49.

According to OSK Research: “The dip in 2Q revenue was mainly due to lower orders due to more rigorous client screening by the company in order to prevent bad debts. We expect the group’s revenue to normalize around 4Q and the full year performance to be generally slower compared with last year.”

This shows that the management is prudent & conservative & preparing for the worst case scenario (China hard landing). Hence, even if the worst do happen in the future, it will not suffer that much! If the revenue can normalize around 4Q as expected by OSK then there’s still hope. Revenue downturn could be temporary.

In the past 2 years, the company recommended dividend when they announced the 1Q results in end May. So watch it carefully, if they give >= 3.11 sen dividend then the dividend yield is still very good!

I believe investors should do their own homework & analysis, rather than listening to the buy/sell calls from those half baked sifu or worst still, spammer.

Shirley1, info on cash level & stocks holding of Icap is available in quarterly financial reports & annual reports.

I believe investors should do their own homework & analysis, rather than listening to the buy/sell calls of those half baked sifu & worst still, spammer.

The spamming robot is malfunctioning again :)

Good luck & wish you strike the jackpot! :)

LOL. By probability, the winner is always Sports Toto, so ... should buy more of its shares. :)

During the dot com bubble, WB was laughed at for not investing in dot com companies. When the dot com bubble burst, WB was the one who got the last laugh.

History will repeat itself, all bubbles will burst in the end and it’s just a matter of time!

As proven in the past, in the long term, WB wins!

Foreign funds’ transactions (7/9/12 announcement):
Laxey Partners Ltd.

Type of transaction, Date of change, No of securities, registered holder, (Market Low-High(RM)):
Acquired, 06/09/2012, 42,000, Credit Suisse Securities, (2.24-2.28)

Open market purchase

Total no of securities after change: 9,082,491, 6.49%

Good news, Foreign funds still buy Icap when the market crashed on 6/9/12. :)

Below is an extract from an article written by Warren Buffett in Feb 2012:

Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be about $9.6 trillion. Call this cube pile A.

Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today's annual production of gold command about $160 billion. Buyers -- whether jewelry and industrial users, frightened individuals, or speculators -- must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil (XOM) will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

Admittedly, when people a century from now are fearful, it's likely many will still rush to gold. I'm confident, however, that the $9.6 trillion current valuation of pile A will compound over the century at a rate far inferior to that achieved by pile B.

Foreign funds’ transactions (6/9/12 announcement):
City of London Investment Management Company Ltd.

Type of transaction, Date of change, No of securities, registered holder, (Market Low-High(RM)):
Acquired, 30/08/2012, 41,000, The Bank of New York Mellon, (2.29-2.30)
Acquired, 03/09/2012, 1,000, The Bank of New York Mellon, (2.28-2.30)
Acquired, 03/09/2012, 109,000, Northern Trust
Acquired, 04/09/2012, 25,000, Northern Trust, (2.29-2.31)

Open market purchase

Total no of securities after change: 8,893,600, 6.35%

05/09/12: NAV=RM2.97, Price=RM2.28, ICAP traded at 23.2% discount.

If Icap sell padini to take profit, padini will be a goner!

Hehehe, this spamming robot has software malfunction again.
His last target range was "Buy Icap < 2.33, hold at 2.33-2.36, sell at 2.37-2.82 on Aug 16, 2012 07:00 PM"

shirley1, I'm not sure the % vote required to pass an EGM like this, but I think it should be 75% - similar to those of 'Major disposal of assets'.

Kcchongnz, the 2 foreign funds already have 12.68% shares (Laxey Partners: 6.46%, City of London Investment: 6.22%). From 2011 annual report, the largest shareholder only hold 1.988% of shares. Hence, they should be the largest shareholders now. Capital Dynamics (TTB’s company) only hold 0.492%, its director Tunku Yahaya hold 1.928% - total only 2.42%.

From my observation, the foreign funds are buying very slowly, I think they are accumulating this stock but not pushing up the price. If they can accumulate enough shares, they may call for an EGM to either open-end (convert to unit trust where price = NAV) or liquidate Icap.

In EGM, they only count the votes of those who attend or send back their proxy forms. Usually the attendance rate is quite low. For example, from announcement of recent OSK EGM, only 398M shares voted out of total of 940M shares with voting rights. That’s only 42% of the total shares. If the foreign funds have 30 to 40% shares, in EGM where only 42% attend, their % will be magnified to 71 to 95% votes – can pass the resolution easily!

If an EGM is held, very likely most of the shareholders will support it since the all time high price is RM2.82, no one bought higher than that & it is < current NAV!

Foreign funds’ transactions (3/9/12 announcement):
Laxey Partners Ltd, United Kingdom.

Type of transaction, Date of change, No of securities, registered holder, (Market Low-High(RM)):
Acquired, 27/08/2012, 45,000, Credit Suisse Securities, (2.29-2.31)
Acquired, 29/08/2012, 25,000, Credit Suisse Securities, (2.28-2.30)
Acquired, 30/08/2012, 36,000, Credit Suisse Securities, (2.29-2.30)

Open market purchase

Total no of securities after change: 9,040,491, 6.46%

One simple solution to prevent imposters could be to include User ID in a bracket, eg KC Loh (lkc121). No matter how you change your nick name, your user ID stays the same!

Hooi,you subscribed to www.icapital.biz?
Are you paying the 'RM720 - 1 Yr' or 'RM199 - 1 Yr' rate, is it worth it?

29/08/12: NAV=RM3.04, Price=RM2.28, ICAP traded at 25.0% discount.

You make good points when you're not spamming! :)

Hooi, should pay more attention to drastic measures like Open-Ending & Liquidation. OK, now back to your spamming! :)

In Section 6.7 of ICAP IPO prospectus, titled ‘Managing discounts’, TTB mentioned several measures to reduce or eliminate discounts. (Bursa Announcements: http://www.bursamalaysia.com/market/listed-companies/company-announcements/858126 - download ‘ICAPITAL-IndustryOverview (557KB).pdf’). I summarized it below:

The options available include share repurchase, open-ending, takeover, liquidation, managed distribution policy and shareholder activism.

Shareholder activism: shareholders have the power to pressure management to do something positive to narrow the discount. … attempt to realize the full value of the CEF by proposing a share repurchase, conversion to open-end structure, takeover or liquidation.

Share repurchase: CEF may offer to repurchase shares in order to narrow the discount. … helps to boost demand … when CEF buys back shares at a discount to NAV, the NAV/share increased if the shares bought back were cancelled.

Open-Ending: CEF could choose to convert to an open-end structure like that of unit trusts. Once a CEF open-ends, investors can sell their shares in the fund back to the fund manager, who redeems them at NAV. If the CEF does not have enough cash to meet redemptions, the fund manager can sell the assets to raise cash.

Takeover: A CEF that trades at a discount may be a target for a takeover as it represents an opportunity to buy assets on the cheap.

Liquidation: shareholders of a CEF may opt for liquidation, which essentially terminates the CEF. As the CEF approaches the liquidation date, the discount narrows. At the close of business, all assets are liquidated and shareholders are returned an amount equal to the NAV/share.

Managed distribution policy: CEF are introducing or increasing the frequency of dividend payments to shareholders in order to avoid shares from trading at a discount. … Nevertheless, such consistent cash outflows could compromise the performance of CEFs.

If ICAP continue to trade at discount, I think sooner or later some impatient shareholders may rise up & asking TTB to implement one of the options above, reminding him that the theme of this year Merdeka Day is … ‘Janji ditepati’ :)

Kcchongnz, good points, I agree with you!

It is nice to know that more & more knowledgeable people are writing in this thread, otherwise it would be filled with spams from a simpleton :) see page 1 of this thread & you’ll know what I mean.

BTW, there are drastic measures to reduce & eliminate the discount of a closed-end fund. I’ll write about it when I have time. For those who can’t wait, I’ll give you a hint: search the IPO prospectus published in 2005 which can be downloaded from Bursa announcement website... Let’s see how many people are willing to do their homework :) If you can find it, you’re welcome to write it on my behalf.

To be continue…

Good news: Earnings have turnaround - earnings uptrend in last 2 quarters (Mar12 & Jun12). Some directors also buying recently!

Foreign funds’ transactions (27/8/12 announcement):
Laxey Partners Ltd, United Kingdom.

Type of transaction, Date of change, No of securities, registered holder, (Market Low-High(RM)):
Acquired, 22/08/2012, 16,900, Credit Suisse Securities, (2.32-2.34)
Acquired, 24/08/2012, 24,500, Credit Suisse Securities, (2.31-2.32)

Open market purchase

Total no of securities after change: 8,934,491, 6.38%

Can get Nobel Prize in Bullshitology! :)

aiya angsri, they want big fish only, small fish like you are not welcome lah :)

Smart move :). From my calculation, it has RM0.44 net cash/share in Mar12 results, if you can buy at RM0.50 then you actually spend only RM0.06/share to buy it :).