Posted by jpleow > 2012-08-28 21:18 | Report Abuse

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…

Posted by Liewas > 2012-08-28 21:33 | Report Abuse

It is over price. PER 27.98, Y-Y profit growth inconsistance. The funny thing is I can't find this fund paying any dividend so far. Technically also formed a lower high and low trading volume. Any entry must broke out 2.35 before can be considered. If you wish to invest this closed end fund, you have to prepare to hold for long term.

Posted by shirley1 > 2012-08-28 21:40 | Report Abuse

Funny huh ?  Some are still willing to buy unit trust with around 5% commission..  If buy this one commission less than 1%, indirectly save 4% liao, plus additional discount ttb give.  I think maybe this ttb never believe in giving dividend la, anyway i also don't care, buy some for long term, kids education fund. And hope miracle from ttb or the investors.

Posted by kcfan > 2012-08-28 21:44 | Report Abuse

Icap-Good stock must keep as mutual funds investment.

Posted by kcchongnz > 2012-08-29 05:23 | Report Abuse

jpleow, I didn't realize you have written about the same thing before in this thread. Waiting to read your next one as you have stated about the "drastic measure to reduce" the discount.
Liewas, Closed-end fund should not be valued according to PER. The value is directly based on the NAV of the underlying shares it holds. And also its value should not be related to any technical indicators. Yes, it is for long-term investment, good for people like shirley1, low costs, good fund management, for kid's education, in 5, 10, 15 years time. Any closed-end fund trading more than 10% discount is good to buy for your children's education long term.
Why should a long-term investor in a closed-end fund cares about dividend? Once dividend is declared, you have to pay tax (the company does it for you) and straightaway you lose 25% of dividend declared in the single-tier system. If the money is retained in the fund and buy more shares of good companies, the value of the icap will appreciate. Note that capital gain is not taxable in the hands of individual investors.

Posted by hooi > 2012-08-29 09:20 | Report Abuse

Closed-end fund trading > 15% discount is good to invest-Benjamin Graham

Posted by hooi > 2012-08-29 11:20 | Report Abuse

Bought Icap at 2.29

Posted by jpleow > 2012-08-29 12:53 | Report Abuse

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’ :)

Posted by hooi > 2012-08-29 14:22 | Report Abuse

TTB said many listed companies trade at discount, Icap only prepare to repurchase if discount = 50%

Posted by hooi > 2012-08-29 14:50 | Report Abuse

Bought more Icap at 2.29

Posted by hooi > 2012-08-29 15:43 | Report Abuse

Bought Icap at 2.28

Posted by jpleow > 2012-08-30 11:42 | Report Abuse

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

Posted by hooi > 2012-08-30 12:15 | Report Abuse

Liquidation in 2020, NAV > 10.00

Posted by jpleow > 2012-08-30 13:31 | Report Abuse

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

Posted by jpleow > 2012-08-30 18:37 | Report Abuse

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

Posted by hooi > 2012-09-03 14:54 | Report Abuse

Bought Icap at 2.28

Posted by jpleow > 2012-09-04 10:04 | Report Abuse

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%

Posted by kcchongnz > 2012-09-04 12:56 | Report Abuse

jpleow, thanks for your previous posting about "Managing discounts" of icap. Good piece of information. However, the shareholdings of icap is so fragmented, I think it is difficult to get the shareholders to come together for "Managing discounts" as described above. Theboard of directors od icap and Tan Teng Boo won't want that to happen too because it is against their personal interest. The only hope is the couple of foreign funds, if they continue to buy more of icap shares and obtain a high majority stake, then maybe they can gang up and do the "Managing discount" exercise. I don't know if there is any constraint to do that in Malaysia or not, but in US, that could happen.

Posted by Namoyaki Takarajima > 2012-09-04 13:05 | Report Abuse

"hear hear"

Posted by jpleow > 2012-09-04 18:18 | Report Abuse

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!

Posted by shirley1 > 2012-09-04 18:42 | Report Abuse

Jpleow, izit more than 50% vote for is enough ?

Posted by kcchongnz > 2012-09-04 19:25 | Report Abuse

jpleow, you really know icap very well. I think you would be right that the "managing discounts" would be carried out if the 2 foreign funds hold 30% to 40% of icap like you mentioned. At least the chance that the discount will narrow is high now with the participation of the foreign funds. With the discount of 24% at the close of today, icap is a very good low-risk bet.

Posted by jpleow > 2012-09-05 08:45 | Report Abuse

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'.

Posted by hooi > 2012-09-05 16:55 | Report Abuse

Sold Icap at 2.28, bought Padini at 2.06

Posted by jpleow > 2012-09-05 18:37 | Report Abuse

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"

Posted by shirley1 > 2012-09-05 20:35 | Report Abuse

Program bugs.

Posted by hooi > 2012-09-05 21:34 | Report Abuse

Buy Icap < 2.25, hold at 2.26-2.27, sell at 2.28-2.80, Icap NAV will drop after Padini closed at 2.06

Posted by tonylim > 2012-09-05 22:15 | Report Abuse

hooi, is icap selling, whats their % holding in padini

Posted by hooi > 2012-09-06 08:57 | Report Abuse

Icap bought Padini 22,700,000 shares

Posted by jpleow > 2012-09-06 09:34 | Report Abuse

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

Posted by hooi > 2012-09-06 15:53 | Report Abuse

Bought Icap at 2.24

Posted by jpleow > 2012-09-06 18:15 | Report Abuse

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

Posted by jpleow > 2012-09-06 18:35 | Report Abuse

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%

Posted by jpleow > 2012-09-08 11:51 | Report Abuse

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. :)

Posted by hooi > 2012-09-08 14:04 | Report Abuse

Market not crashed, just a correction. If market crash, CI > 10%

Posted by chongkonghui > 2012-09-10 10:10 | Report Abuse

If I have a fund of over million, I will keep buying iCap slowly at huge discount.

Posted by hooi > 2012-09-10 10:34 | Report Abuse

Me too!

Posted by chongkonghui > 2012-09-10 10:47 | Report Abuse

The Annual Report not yet released, compared to past few years, it is considered LATE. Wonder if any reason for it???

Posted by hooi > 2012-09-10 15:03 | Report Abuse

Bought Icap at 2.24

Posted by hooi > 2012-09-11 10:33 | Report Abuse

Bought Icap at 2.23

Posted by hooi > 2012-09-11 12:16 | Report Abuse

Bought Icap at 2.22

Posted by hooi > 2012-09-11 12:29 | Report Abuse

Sold Icap at 2.25, buy Icap < 2.23, hold at 2.23-2.24, sell > 2.24

Posted by hooi > 2012-09-14 09:18 | Report Abuse

Sold Icap at 2.25 & 2.26

Posted by hooi > 2012-09-14 17:23 | Report Abuse

Buy Icap < 2.24, hold at 2.24-2.26, sell at 2.27-2.50

Posted by hooi > 2012-09-18 15:04 | Report Abuse

Sold Icap at 2.27

Posted by hooi > 2012-09-18 18:41 | Report Abuse

Buy Icap < 2.25, hold at 2.25-2.27, sell at 2.28-2.50

Posted by hooi > 2012-09-19 19:28 | Report Abuse

Buy Icap < 2.24, hold at 2.24-2.26, sell at 2.27-2.50

Posted by hooi > 2012-09-21 19:01 | Report Abuse

Buy Icap < 2.24, hold at 2.24-2.25, sell at 2.26-2.50

Posted by hooi > 2012-09-24 09:17 | Report Abuse

Sold Icap at 2.26

Posted by Jeremy 1 > 2012-09-25 09:00 | Report Abuse

hooi, please advise on the potential of Icap? What's the recommended price to buy in? U mentioned "Buy Icap < 2.24, hold at 2.24-2.25, sell at 2.26-2.50", I wonder how much profit u would gain from the small spread