Posted by cnman53 > 2020-10-27 08:09 | Report Abuse

To put my perspective in clearer picture, I started investing in iCapital.biz since its inception 15 years ago. I was all along a subscriber of iCapital newsletter and have been attending iCapital.biz AGMs throughout the years except for the 15th AGM. I believe in Independence, Intelligence and Integrity as "enshrined" in iCapital's motto. I am looking at enabling iCapital to better serve its common shareowners who have followed the company in the past 15 years or so.

As I have attended all except one of the AGMs, I have seen so many familiar old faces dropping out the later AGMs that I began to wonder if they have cashed out or become so ill or ? But although they attend AGMs and probably other educational investment and financial classes, I think they should be given better information in the Annual Report, which I will be going into soon.

Posted by cnman53 > 2020-10-27 08:13 | Report Abuse

For that matter, referring to lawyer or other professional for advice is not as good as using our own judgment at times. After all the internet is not short of information. It is only if you know how to pick the true ones from chunks of rubbish.

Posted by dumbMoney > 2020-10-27 13:52 | Report Abuse

@cnman53 I don't mean asking other professionals for advice on investment, but specifically on whether the dual listing expense has been properly authorised by the board and shareholders have been informed accordingly, and not something sprung as a surprise in the footnote in the annual report. It is stated as an reimbursement for expenses incurred by the fund manager, so the question is, was it properly authorised by the board of directors? This is where one may need to refer to the company's M&A/constitution, SC and Bursa listing rules, and things may not be that straight forward for those not professionally trained in corporate governance matters.

Posted by dumbMoney > 2020-10-27 14:16 | Report Abuse

The dual listing was mooted by TTB back in 2012 during his defense of his position at the AGM. Why was it kept off the books until now? Was it the intention for the fund manager to bear the expenses at that time, then why only pass it on to the company now? If the two independent non-executive directors actually resigned over this, shareholders have a corporate governance problem on their hands.

Posted by fong7 > 2020-10-27 18:40 | Report Abuse

@dumbbMoney, seriously, you should forget about the dual listing thing. TTB just using this thing to give depressing shareholders some hope for them to continue supporting icap. The simple rule of thumb on dual listing: icap's performance. Just ask yourself, will you buy icap listed in HK if the icap listed in bursa performs badly? This is the basic, performance. In fact, icap performed much better when TTB mentioned dual listing while being "attack" by the london boys. Look at icap in recent 5 years, performance was depressing. There is no way icap could find any new international investors to support the dual listing.

Posted by fong7 > 2020-10-27 18:42 | Report Abuse

Every time JohnDough speaks, icap price drops further. Because he portraits a cult group of blind supporters, which scared the hell out of many people. People starts to feel creepy if continue to hold their icap when looking at the psycho behave JohnDough.

Posted by dumbMoney > 2020-10-27 19:46 | Report Abuse

@fong7 Seriously, should shareholders foot the dual listing expenses when they were not even aware that they are liable for it and gained absolutely zero from the exercise? The least they can do is to query BOD how and why this came about, and if the answer is not to their satisfaction, try to claw it back. There is such a thing as breach of fiduciary duty by directors. Like they say, if shareholders allow this to happen in silence, they only have themselves to blame. This applies to COL in particular, as their share of the bill is more than a million. Definitely worth their while to establish whether they have a cause of action against the directors. Under the current code of corporate governance for public company directors, they cannot afford to be just a rubber stamp anymore, as they can now be subject to public reprimand, fine and even jail term for offences under the Act even in a non-executive capacity. Better to resign than to be dragged in.

Posted by cnman53 > 2020-10-28 13:48 | Report Abuse

Every body has his point. Let's look into every nook and cranny in our investigation. Before the verdict is out, no one should be declared convicted.
Also please be guided by the three principles of Independence, Intelligence and Integrity. If you find any positive thing which is good for the company during the course of your investigation, please also share to all.

Posted by cnman53 > 2020-10-28 13:50 | Report Abuse

Before I proceed to publish my rework on performance of iCapital.biz, let me say the first impression I got after I looked into the 2020 Annual Report page 5 where the performance of iCapital.biz is shown in Table 4 and Table 5.

Extract from Table 4:
“
Table 4: Cumulative Return (%) From 19/10/2005 to 31/12/..
Year NAV Price KLCI Cash
Year NAV Price KLCI Cash

---

Table 5: Annualised Return (%) From 19/10/2005 to 31/12/..
Year NAV Price KLCI


“

---

The benchmark against KLCI index I think is a mismatch.

The rationale being:-

iCapital.biz is a collective investment fund managed by a fund manager whereas KLCI index is not managed by any fund manager. So there is no stock selection skill in the latter which can be used to compare with iCapital.
This is the main reason for the mismatch.

Then there is a second reason.
iCapital.biz has to pay a substantial (or reasonably substantial) fee to its fund manager whereas if you invest in an index ETF, the fees is negligible.

So what else can iCapital.biz’s performance be bench marked against?
I think the fund manager can compare it to one of the many unit trust funds out there.

Is it then still a mismatch since iCapital.biz is a Closed End Fund, a sacrosanct fund, while the others are all ordinary unit trust or mutual funds?

Never mind, we accept the superior position that iCapital.biz possess in comparison with them, but just try to have a look.

May be we can make a discount on iCapital.biz net asset value (say 10% less the NAV) so as to compensate for that unit trust fund manager’s disadvantage of not able to handle their funds at their own free will but always disturbed by their unit holders who may want to sell when the fund manager wants to buy and vice versa. This disadvantage of the ordinary unit trust is made well known by Mr Tan.

At least this is a better alternative out of no better choice.

Posted by cnman53 > 2020-10-28 13:54 | Report Abuse

Apart from absolute legal compliance, I think for iCapital.biz to live up to its motto of Independence, Intelligence, Integrity, its leaders have an extra ethical and moral standard to show. It cannot just get by by complying with the minimum legal requirement.

Posted by cnman53 > 2020-10-28 13:56 | Report Abuse

I am still waiting for Mr Administrator to retrieve my lost posting of 24 Oct. i3 also has a motto of Independent, Intelligent and Informed. I hope I am not disappointed.

Posted by cnman53 > 2020-10-28 14:10 | Report Abuse

Dual listing in Hong Kong is a dream too unrealistic if you look into the website of Hong Kong Stock Exchange dual listing rules. Chapter 19C.05 mentions among others that the minimum expected market capitalisation of the applicant company is HKD10 billion (roughly MYR5 billion). Our iCap market capitalisation in its whole 15 year history has never topped MYR500 million. Less than 10% of the minimum requirement. To still proceed is what the Chinese proverb says:

愚公移山

Posted by cnman53 > 2020-10-28 14:14 | Report Abuse

To make it simpler, if you are the fund manager, will you go on with this endeavour and ask yr stakeowner to pay the expenses?

Posted by dumbMoney > 2020-10-28 14:15 | Report Abuse

@cnman53 The historical comparison of fund performance is always against the KLCI, which don't adjust for dividend yield of the component stocks. So it has to be against the total returns indices, but this is not generally available, even though Bursa has it somewhere in their database. I used the Dow Jones Malaysian total market total returns index, but it is no longer available now. The null hypothesis is manager's alpha, the ability to beat the benchmark after expenses.

Posted by cnman53 > 2020-10-28 14:18 | Report Abuse

Not RM1,000, Not RM10,000 But almost RM7 million.

Posted by cnman53 > 2020-10-28 14:20 | Report Abuse

That is half the total dividend paid out to us stakeowners in 2013, the only one.

Posted by cnman53 > 2020-10-28 18:39 | Report Abuse

My first comment on iCapital.biz NAV performance has just been successfully posted on my i3 blog. Basically I am not satisfied as to how iCapital.biz has gone about its depiction of its performance. The benchmark mismatch I have already said.

The other major issues are the lack of information on how the data are sourced or derived. For a company whose normal P&L and Balance Sheet do not show the true financial status, it should be more transparent in showing people its performance. By not disclosing the relevant facts, the sophisticated investor will surely be deterred.

Now I know what is the major issue, or one of the major issues that cause the share price to perform poorly.

Posted by cnman53 > 2020-10-28 18:54 | Report Abuse

Mr DumbMoney, thank you for pointing out that it is the historical comparison of fund performance against the KLCI. I don't deny that. But as I have reiterated again, iCapital.biz has a motto that expounds Independence, Intelligence and Integrity and also we have a manager who is known for his contratrian thought and view, why can't we use a different criterion as long as it gives a better comparison.

If it is a must to compare KLCI, I don't disagree. But you can always append another comparison if not in the main section, then in the notes or appendices. Like our manager has always advise investor not to only look at the P&L and Balance Sheet which are conventional statistics that have to be produced. He knows how to guide people to the other areas which he thinks he want people to see. So why not show the comparison with other unit trust in addition to the statutory requirement.

In fact I have suggested in one of the AGMs to give additional information in addition to the minimum statutory requirement. But until now there is no improvement.

Posted by dumbMoney > 2020-10-28 22:53 | Report Abuse

@cnman53 Please check your i3 messenger app for p.m.

Posted by observatory > 2020-10-29 02:01 | Report Abuse

@ cnman53
I agree with dumbMoney. For Malaysian funds, open or closed-end, the best comparison is still the widely followed KLCI index after dividend reinvested.

I agree that benchmarking against the index over a short period of say 6 months, 1 year, or even 3 years could be misleading/ unfair to managers. Value fund managers usually underperform the benchmark when growth stocks are in favor and vice versa.

However, for a longer period of one cycle (defined as from one market top to the next top, or one bottom to the next bottom), all fund managers should be measured against the index. Even Warren Buffett’s Berkshire Hathaway is compared against S&P500. Berkshire lagged S&P500 in the late 90’s tech mania but more than made up after the bubble burst.

For Malaysia's case, one may define the cycle of bottom to bottom as Mar 2009 bottom (Global Financial Crisis) to Aug 2015 bottom (oil rout, 1MDB, Ringgit depreciation…). If you don't accept 2015 as a bottom (it was a bear market with more than 20% drop), surely Mar 2020 would have qualified as a bottom.

How did KLCI perform over this market cycle?

Mar 2009: 837
Aug 2015: 1,504 --- 80% growth (before dividend) since Mar 2009, or 9.6% CAGR
Mar 2020: 1,208 --- 44% growth (before dividend) since Mar 2009, or 3.4% CAGR
(Source: Trading View, Excel RRI formula)

How did ICAP perform during the same period?
Mar 2020: RM1.25
Aug 2015: RM2.10 --- 68% growth (before dividend) since Mar 2009, or 8.4% CAGR
Mar 2020: RM1.85 --- 48% growth (before dividend) since Mar 2009, or 3.6% CAGR

Comparing KLCI to ICAP:

ICAP clearly underperformed KLCI during the cycle of Mar 2009 to Aug 2015, even before dividend reinvestment of KLCI is considered.

During the longer cycle from Mar 2009 to Mar 2020, on appearance ICAP outperformed KLCI by a whisker. But that was before dividend reinvestment is considered.

ICAP only paid a miserable one-time dividend throughout its 15 years in existence. While I don’t have the full data, on average KLCI 30 component stocks (which consist of many high dividend yield banks) have about 3% dividend yield.

Therefore during the 11 years from Mar 2009 to Mar 2020, while ICP CAGR is 3.6%, the compound annual growth rate of KLCI is about 3.4% + 3%, i.e. in the range of 6% to 7% per annum.

If ICAP is an open-ended unit trust it would have been closed down long ago.

Posted by observatory > 2020-10-29 02:27 | Report Abuse

@ cnman53
If you still don’t like to use KLCI index as a comparison, my suggestion is to compare against “cost of equity”, as public listed companies are subjected to.

The idea is straight forward. Assume an investor has capital that can be invested over a period of 10 years.

The lowest risk investment will offer the lowest rate of return, called the “risk-free” rate. In the Malaysian context, the "risk-free" investment is the 10-year bond issued by the Malaysian government. It is “risk-free” because we assume that the Malaysian government won’t default.

Currently this risk-free rate is slightly under 3%. In the past 10 years, it averaged around 3% to 4%.

For any other 10 year investment that is riskier, the investor will rationally demand a higher return. For example, one may invest in freehold property in a prime location with the expectation that net rental yield + appreciation over 10 years is at least 6% to 8%.

For the KLCI stock market as a whole, I would demand a slightly higher return, say around 7% to 9%. This is the “cost of equity” for the stock market. Note my 7% to 9% target is slightly higher than the 6% to 7% that KLCI has delivered (after dividend reinvestment) between Mar 2009 to Mar 2020.

What is the right “cost of equity” for ICAP?

Given it is a captured closed-end fund, personally I see it as equally risky, if not riskier investment, than a diversified 30 component stock of KLCI 30. I would at least demand a return of 7% to 9% per annum, like what I demand from KLCI.

But ICAP only returned 3.6% over that period!

Given that, one may as well park the money in a Malaysian government bond, which is safer. If buying bonds is difficult, one may just place 12 months FD and roll the FD over every year for over a decade. The FD still matches ICAP return!

Posted by dumbMoney > 2020-10-29 04:49 | Report Abuse

dumbMoney @ cnman53 and observatory - All the comparisons above are based on NAV returns for iCap. Other than the brief period when the shares traded above NAV, what you see is not what you get if you want to sell the shares. Realistically, the only chance now you can realise NAV is when TTB calls it quits and liquidate the fund, pay a special dividend or do a share buy back.
TTB continues to justify holding all that cash by equating it as an almost free (FD rates - tax - management fee is around zero) call option with no risk of permanent capital loss. He is supposed to be managing a value fund, not a capital guaranteed fund. Shareholders don't expect him to be able to walk on water and make returns without risk. It is like the only sure way of not getting infected with the virus is to stay at home, but without being able to go out and work (WFH excepted), you have no income. The moment TTB exercise his call option and buy shares, he then runs the risk of permanent capital loss as per his argument. Risk is only the down side of volatility, the other side is gains. The name of the game is managing volatility, not avoiding it altogether, or as observatory would say, just park your money in FD, no need to pay tax and management fee then.

Posted by hpcp > 2020-10-29 11:44 | Report Abuse

Glad that I had sold several years back and moved on

Posted by cnman53 > 2020-10-29 12:52 | Report Abuse

Mr DumbMoney, on 28 Oct, you ask me to check my i3 messenger app for p.m. What do you mean by that?

Posted by cnman53 > 2020-10-29 13:00 | Report Abuse

Mr Observatory and Mr DumbMoney

You all have good knowledge. I would like to learn from you two if given the time.

But at the moment, My priority is to seek all available data and information (which is publicly available and cannot be contested against) to help in my investigation into the information divulged in iCapital.biz 2020 Annual Report.

Other than that, let's leave aside for the time being.

Posted by cnman53 > 2020-10-29 13:58 | Report Abuse

Regarding my question above, Mr DumbMoney. OK. I found it.

Posted by cnman53 > 2020-10-29 15:31 | Report Abuse

The above is the reported lost post of 24 Oct 2020 with Chinese added in now.

Posted by observatory > 2020-10-29 16:44 | Report Abuse

@dumbMoney,
I agree with you that ICAP return should be based on market price. My analysis above is in fact based on the ICAP market price which was extracted from the Trading View website.

It is misleading for the TTB to promote measuring ICAP performance based on NAV rather than market price return. As you have put it well, when an investor, due to his own financial circumstances or other reasons needs to sell ICAP, he can only sell at market price and not NAV!

ICAP's latest published NAV is RM2.83 per share. But the closing price is only RM1.91. The market places a whopping 33% discount on ICAP NAV!

Potential investors who have studied ICAP long history of underperformance knows the risk of buying into ICAP today. Despite its apparent deep discount, new investors are likely to get trapped with the same if not growing discount in the future years. Therefore almost no one, not even the ICAP fund manager himself, wants to buy ICAP! The only established buyer is the City of London who buys in the hope to force through changes to unlock ICAP value, which is resisted by the board and TTB.

ICAP remains a value trap until the Board of Directors steps up to demand better performance from TTB (unlikely), or until the board is voted out (difficult since a segment of long-term shareholders has been instilled with fundamentally wrong concepts that are actually detrimental to their own interest!)

There is another way to look at this fallacy. TTB believes his fund is undervalued because he urges investors to measure the fund by NAV and not by the market price. But if ICAP is indeed under-valued, why TTB who holds more than 60% fund asset in cash has never bought back ICAP shares? Why not exploit this market “mispricing” at his own fund as any true value investor would have done?

If TTB is a value investor, he needs to act like what he claims to be. Unless, of course, ICAP fully deserves its deep NAV discount, which means TTB is wrong for claiming ICAP is under-valued.

The absence of buyback over these years for a fund that is flush with cash speaks louder than words!

Posted by dumbMoney > 2020-10-29 17:41 | Report Abuse

@observatory Using market price as the yardstick, a potential buyer (or the company itself) buying at $1.91 is looking at a potential upside of 48% if he can cash out at $2.83 in order to entice him to buy the stock. This is the cost of equity capital for shareholders. So is iCap a cheap or expensive stock? Depends on whether you are a buyer or seller.

Posted by dumbMoney > 2020-10-29 17:48 | Report Abuse

For a seller at the current price, he is only getting slightly more than the cash backing of the shares, the rest of the share portfolio is given away as freebie to the buyer. So even if they want to sell, they are trapped.

Posted by dumbMoney > 2020-10-29 18:31 | Report Abuse

@cnman53 Two common measurements of fund manager's performance are the Manager's alpha and Sharpe Ratio, which can be easily calculated and understood by most investors with some knowledge of portfolio management.

Posted by cnman53 > 2020-10-30 12:27 | Report Abuse

Regarding the dual-listing exercise in Hong Kong, I have briefly gone through the rules of Bursa Malaysia in respect of a listed company’s transaction as contained in Chapter 10.

Below is the link:-

https://www.bursamalaysia.com/sites/5bb54be15f36ca0af339077a/content_entry5ce3b50239fba2627b2864be/5ce3b5c439fba264f32eb401/files/MAIN_Chap10_NewIssOrs__13Aug2020_.pdf?1597319732

I have extracted the relevant parts as follow:-

“Extract
PART B – DEFINITIONS
(g) “percentage ratios” means the figures, expressed as a percentage, resulting from each of the following calculations:
(i) the value of the assets which are the subject matter of the transaction, compared with the net assets of the listed issuer; “


“Extract
PART E – RELATED PARTY TRANSACTIONS
10.08 Related party transactions
(1) Where any one of the percentage ratios of a related party transaction is 0.25% or more, a listed issuer must announce the related party transaction to the Exchange as soon as possible after terms of the transaction have been agreed, unless -
(a) the value of the consideration of the transaction is less than RM500,000; or
(b) it is a Recurrent Related Party Transaction.
The listed issuer must include the information set out in Appendices 10A and 10C in the announcement.”

“Extract
APPENDIX 10A
Contents of announcement in relation to transactions
(paragraphs 10.06(1), 10.08(1), 10.08(11)(i) and (j), 10.11A(1)(c), 10.16 and 10.17)
Part A
General information to be included, where applicable, in announcement of transactions
DETAILS OF THE TRANSACTION
(1) The details of the transaction including the following:
(a) the date on which the terms of the transaction were agreed upon;
(b) the manner in which the consideration will be satisfied including the terms of any
arrangement for payment on a deferred basis;

RATIONALE AND BENEFITS OF THE TRANSACTION
(7)The rationale for the transaction including any benefit which is expected to accrue to the listed issuer from the business, financial and operational perspective.

PROSPECTS
(9) The prospects of the assets or interests to be acquired.
RISKS OF THE TRANSACTION
(9)The risks in relation to the transaction including risk factors of the assets or interests to be acquired.

EFFECTS OF THE TRANSACTION
(11)The effect of the transaction on the listed issuer, which includes the effect of the transaction on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ direct and/or indirect shareholding of the listed issuer, in tabular form.

APPROVAL / CONSENT REQUIRED
(12)A statement on whether the transaction is subject to approval of the shareholders and the relevant government authorities together with the following information:

INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED
(14)A statement on whether the directors, major shareholders or persons connected with a director or major shareholder, have any interest, direct or indirect, in the transaction, and the nature and extent of their interests.

DIRECTORS STATEMENT / RECOMMENDATION
(15)A statement by the board of directors, excluding interested directors, stating whether the transaction is in the best interests of the listed issuer. Where a director disagrees with such statement, a statement by the said director setting out the reasons and the factors taken into consideration in forming that opinion.

ESTIMATED TIME FRAME FOR COMPLETION
The estimated time frame to complete the transaction. End of extract “

Comment:

It should be noted that besides compliance with the rules and law literally we expect iCapital.biz to show a little bit more in its spirit to protect if not improve on the shareowners’ benefit, to uphold the spirit of Independence, Intelligence and Integrity.

In view that the dual listing cost or reimbursement as stated in the annual report is RM6 million plus. This transaction falls under the ambit of Chapter 10 clause 10.08(1) where it states among others “the percentage ratios of a related party transaction is 0.25% or more, a listed issuer must announce the related party transaction to the Exchange as soon as possible…

(The networth of iCapital.biz at any time its history has never topped RM500 million.
RM6 million is 1.2% of RM500 million. The 0.25% limit has been breached.)

It its announcement through Bursa, iCapital.biz will have to disclose among other things the following:-

DETAILS OF THE TRANSACTION
RATIONALE AND BENEFITS OF THE TRANSACTION
PROSPECTS
EFFECTS OF THE TRANSACTION
APPROVAL / CONSENT REQUIRED
INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED
DIRECTORS STATEMENT / RECOMMENDATION
ESTIMATED TIME FRAME FOR COMPLETION

Have the above been done?

I want to reiterate that compliance with the law is one thing, upholding the true spirit of the law is another.
If a transgression of the law is committed out of ignorance or negligence, it can still be pardoned. If it is done with full knowledge, alas!

Posted by cnman53 > 2020-10-30 12:29 | Report Abuse

Mr DumbMoney, thank you for the info. But I think these should be left to other time for discussion. For the time being, I will focus on the facts rather than academics.

Posted by dumbMoney > 2020-10-30 15:06 | Report Abuse

@cnman53 A fiduciary is held to a higher standard than just adhering to the laws. It requires acting in the interests of the company and stakeholders at all times.That's where the fit and proper person rule is generally adopted for those needing a licence to operate in the capital markets, to cover things not specifically covered by the various laws.

Posted by cnman53 > 2020-10-30 15:28 | Report Abuse

Lets focus on data and info from publicly available and derived from there. Discussion on methods and approaches can be protracted and leading to no where.

I don't think we can achieve much in the coming AGM but I am prepared to continue my scrutiny on the company's affair long into the future.

Posted by cnman53 > 2020-10-30 15:43 | Report Abuse

My motto (derived from iCapital.biz and i3) are Independence, Intelligent, Integrity and Informed.

To make my argument, my underlying principles are also based on these criteria.

When you put forward a statistical info such as P&L and BL (and in extension to NAV growth tables or Price growth tables or graphs), it not only has to be factual but should also be seen to be transparent.
That is, you should divulge info which are not required by law or convention, but which will let users have a transparent view. In this way only then you can live up to the motto. This will help in raising the share price eventually. It may takes some time but I think this is a method which can be easily done. If the management don't know how to do it, I can offer my help, free of charge.

Posted by cnman53 > 2020-10-30 15:48 | Report Abuse

The next thing I have in mind is looking into the regulations on investment abroad by companies including Closed End Fund.

Any body can offer his existing knowledge? So that I save some time.

Posted by cnman53 > 2020-10-30 19:27 | Report Abuse

In view of the eagerness of shareowners to view the Memorandum & Articles of Association of iCapital.biz, I hope the registrar, Boardroom Share Registrar Sdn Bhd, takes it as urgent to send a digital copy to all shareholders who have requested for a copy.

Please state your fees required.

I hope diligence to discharge one's duty is seen to have been done.

(p/s I was called by telephone on 24 Oct 2020 by someone pretending to be from Boardroom Share Registrar Sdn Bhd that my request for a copy of M&A is to be referred to iCapital.biz. Is this statutary requirement or courtesy to iCapital.biz?

Posted by cnman53 > 2020-10-30 19:29 | Report Abuse

P/s Since then I have not received any news. I think that must be a bogus caller.

Posted by cnman53 > 2020-10-30 19:30 | Report Abuse

P/s I have already completed the registration and verification of shareownership duly with the registrar.

Posted by dumbMoney > 2020-10-30 19:53 | Report Abuse

@cnman53 Check your messenger app re Boardroom Share Registrar. Thanks

Posted by cnman53 > 2020-10-30 19:58 | Report Abuse

Posted by cnman53 > Oct 29, 2020 3:31 PM | Report Abuse X

The above is the reported lost post of 24 Oct 2020 with Chinese added in now.

This is the fourth time that my posting on HKEX dual listing rules have appeared for a short while and mysteriously disappeared after a few hours.

Is this sensitive issue not allowed by Mr Administrator?

Posted by dumbMoney > 2020-10-31 11:09 | Report Abuse

@cnman53 Me too, same experience of posts disappearing even after repeated attempts.

Posted by cnman53 > 2020-10-31 11:27 | Report Abuse

I have gone through the "rules" for discussion in this forum as listed by the host i.e. i3 Investor.com. I don't see I have breached any of the criteria.

I hope the Administrator can give an explanation before he erase a participant's comment.

Posted by i3gambler > 2020-10-31 11:57 | Report Abuse

How to compare ICAP’s NAV, Price with KLCI.

On 20th Oct 2005 (from its website)
NAV = 0.99
Price = 1.03
KLCI = 911.69

On 28th October 2020
NAV = 2.79
Price = 1.91
KLCI = 1495.20

ICAP dividend:
Amount = 0.095, subject to 25% tax
Payment Date: 7th Oct 2013
ICAP Price on 11th Oct 2013 = 2.33 (from its website)

Assume reinvesting the dividend for extra units,
Also assume the investor income tax rate is zero, meaning the 25% tax will be returned
Total holding will increase by 0.095/2.33 = 4.08%,

From 20th Oct 2005 to 28th Oct 2020, that is 15.02 years.

Now we calculate the Compound Annual Growth Rate:
For NAV = (2.79*1.0408/0.99)^(1/15.02)-1= 7.43%
For Price = (1.91*1.0408/1.03)^(1/15.02)-1= 4.47%
For KLCI = (1495.20/911.69)^(1/15.02)-1= 3.35%

However, if we invest into KLCI’s 30 index counters, we receive dividend.

Posted by cnman53 > 2020-10-31 12:13 | Report Abuse

Regarding the dual-listing in Hong Kong Stock Exchange, there are both regulation and commercial risks to consider.

The regulation risk part involves:
(A)
A1 Malaysian regulation governing investment abroad by Companies
A2 Hong Kong regulation in particular Hong Kong Stock Exchange's rules for dual-listing on its bourse.

(B)
Company's own Memorandum & Articles of Association

(C)
The commercial risk part involves:
C1 Fees and expenses involved in the dual-listing exercise
C2 The eventual response from foreign investor towards the dual-listed arm

On risk A2 above, it can be evaluated based on my comment which was repeatedly posted four times and repeatedly erased (I now use the word "erased" as it cannot be a technical glitch since it has appeared for a few hours and then disappear after that, not one time but 4 times!). I am very insistent on sharing this comment as it is important to evaluate the wisdom of iCapital.biz's business decision. By the way, I have also posted it in my i3 blog but I don't know if it can be assessed or also being blocked.

On C1 above, in retrospect now we know what is the cost - RM6 million

On C2, this is the most uncertain risk and argument over it will have no conclusive result. But if you weigh out all the preceding risks you will find that it is not worth a guess/trial.

On B above, as share owner, my experience of getting a copy of iCapital.biz seems to be not very smooth. I would again ask its registrar to show a bit more professionalism in discharging its duty.

For those who don't know, the Memorandum & Articles of a company spells out what the company can do with the outside as well as what the company's management can do in the process of pursuing its shareholders' interest. If the management has done something beyond the original scope of business, it is ultra vires the company, or beyond the power of the company. The management is liable to the shareholders.

So what if the management has done some thing which is supposed to be for the benefit of the company but in the end found out that it is not. And the transaction is done with an outside party, even though it is a closely linked "friendly" company?

The shareholders can seek for recourse provided the transaction is ultra vires the company and is known to that outside party. Meaning it can be claimed back.

P/s Judging from previous experience, I will keep a copy of this thread and republish it if it again get erased.

Quite long, to save time, better copy it.

Posted by cnman53 > 2020-10-31 12:35 | Report Abuse

In fact if the transaction is with a closely linked "friendly" company, it is a "Related Party Transaction" which is required to be announced in Bursa announcement.

Posted by cnman53 > 2020-10-31 12:57 | Report Abuse

P/s

To pay a dividend of 5% to iCapital.biz shareowners, the company will have to dish out a total of RM7 million.

Posted by fairplay > 2020-10-31 14:39 | Report Abuse

Would the authoriies such as SSM have and be agreeable to let concerned shareholders have a copy of M&A of iCapital biz? The concerns of affected shareholders on corporate governance is valid. Shareholders may contact the formal interest group, Minority Shareholders Watch Group "MSWG" with governance issues for it to write in for Board of Directors, to answer at upcoming AGM on the expenses and non-disclosure to Bursa

Posted by cnman53 > 2020-10-31 18:11 | Report Abuse

At the moment we have to focus our attention on the reimbursement for dual-listing in the Hong Kong Stock Exchange. Other discussion on share performance becomes secondary at this moment.
Besides the written regulations and rules, the spirit of fairplay is enshrined in equitable law. Even if the written rules have been minimally complied, if it is dubiously done, the equitable interest of the minority shareowners will be protected in equity.