Posted by dumbMoney > 2 months ago | Report Abuse

Are there other ways to narrow the price discount than the often suggested dividend payout, share buyback and liquidation? Yes, there is one cute little CEF listed in US Liberty All Star Growth fund (symbol ASG). It has managed to trade at a minimal price discount of around 2% with a neat little accounting trick of declaring an annual dividend/distribution of 10% of NAV via 4 equal quarterly payments, but payable only in shares. So nominally, there is a dividend yield of 10% to support the share price, which is higher than most other stocks in the market, but won't affect the AUM at all, i.e. no different than declaring a bonus issue. Because shares have no par requirement and company can return capital to shareholders any time, even though there is no profits for the year, the fund can still make a distribution nominally out of capital. The argument is that while the dividend is not in cash, investors can sell the dividend shares in the market and convert it to cash, and if the share price is close to NAV, the two are fungible, other than the small transaction cost of selling shares instead of banking in cash. So the fund manager is happy because there is no actual cash outflow from the fund and AUM remains unchanged, investors do not suffer steep discount like other funds, and the fund 'earns' a reputation as a solid dividend investment. Like they say, perception is everything, even though nothing has changed. And this is also proof of what my professor has maintained in the M&M Theory of Corporate Finance, that dividend doesn't matter.

Posted by dumbMoney > 2 months ago | Report Abuse

Just to clarify, dividends do matter if there is a big difference between what the shareholders can earn with the cash and what the company can earn with the retained earnings. So if all the company can do is to place it in bank deposits while shareholders can do better with the cash, then of course dividend matters.

Posted by dumbMoney > 2 months ago | Report Abuse

Sorry, the annual distribution is 8% of NAV, not 10%, which is for another sister fund. In case people wonder is this distribution rate sustainable, this is the fund's track record.
as of 11/30/2022
YTD 1 Year 3 Years 5 Years 10 Years 15 Years 20 Years
NAV Return -26.45% -25.09% 7.81% 10.99% 12.90% 9.08% 9.69%
Market Price Return -34.64% -33.75% 6.13% 11.03% 13.81% 9.19% 9.67%
Lipper Multi-Cap Growth Average -27.96% -27.87% 7.01% 9.31% 12.15% 8.36% 9.49%
*Cumulative Total Return
Returns for the Fund and the Lipper Average are total returns, which include dividends, after deducting fund expenses. The Fund's performance is calculated assuming that a shareholder reinvested all distributions and exercised all primary rights in the Fund's rights offerings.
So the long term track record shows this is sustainable. The headings of the table and thecolumns don't show up too well from the copy and paste here, but can go direct to their website online.

Posted by brightsmart > 2 months ago | Report Abuse

this ttb , supposed to be so knowledgeable but no results for 20 years already.

Posted by speakup > 2 months ago | Report Abuse

Last time ppl call him.the Warren Buffett of Malaysia. Now nobody calls him that.

Posted by jackjason > 2 months ago | Report Abuse

i not trust to fund maneger, no matter fund making profit or loss they still steady earn the fees from fund. it should be set the fair rule if fund loss money no fees should be pay. If fund make profit then based on performance charge the fees.

Posted by shylashyl > 2 months ago | Report Abuse

I Lost my funds to fake investment site. Its trading platform danentrades.com i have invested 2000$ and they deposited in


my account 76610$ for withdrawal i have paid 13000USDT and they are still asking for more when i can not even withdraw my money in my account. i saw a link on my Facebook group which is on telegram: nobeliumcryptorecovery and whats app: +919987372422 they work with the FBI in the united states they helped me to recover my scammed and lost $15,000 in total back and also invested with them and now i am very happy. thanks to nobeliumcryptorecovery

Posted by dumbMoney > 2 months ago | Report Abuse

From the above historical returns, an ASG shareholder can just let the dividends be automatically reinvested all the while and make a CAGR of 9.69% NAV or 9.67% market price, with negligible price discount, or sell his dividend shares in the market and make an average 8% annual dividend cash yield. The difference between the two is because of the possibility of dollar price averaging when prices are lower with dividend reinvesting, which I have mentioned previously. So the fund can cater to both classes of long term capital accumulation and periodic income investors by taking that decision to the individual investors rather than at the fund level. Not sure whether the low price discount is the cause or effect of this dividend policy, because then there is a dividend, and it is up to the investors whether they want to reinvest or cash them out? But effectively, there is no cash outflow from the fund, so it is still a closed end fund, the only cashing out is via the stock market.

Posted by Income > 2 months ago | Report Abuse

CEO here makan Gaji Butakah???
Every moon gets free gaji butakah???
I asking for answers for my two of my questions above…




Posted by jackjason > 6 hours ago | Report Abuse

i not trust to fund maneger, no matter fund making profit or loss they still steady earn the fees from fund. it should be set the fair rule if fund loss money no fees should be pay. If fund make profit then based on performance charge the fees.

Posted by qqq47660 > 2 days ago | Report Abuse

70 now is 70 years young. unless there is a law that force the issue, he intends to live off icap fees until he is 90.

Posted by i3gambler > 2 months ago | Report Abuse

For more than 10 over years, the benchmark they used for comparison was KLCI.
But I found that they now have changed the benchmark to MSCI Malaysia.
I did my calculation, and found that the difference in CAGR is about 0.7%.

Posted by JohnD0ugh > 2 months ago | Report Abuse

Some investors would say that because icapital.biz Berhad (ICAP) sells at a NAV discount, they cannot get its full value when they want to retire and sell their shares. Is this focus correct ?

Imagine that this naive investor bought MPI instead of ICAP on 19 Oct 2005, thinking that since MPI is a fast growing semiconductor stock and not selling at a NAV discount, it is a better investment than ICAP.

Well, if this naive investor had wanted to retire and sell his MPI shares years later, he would have to sell them at a huge loss. By 2011, this naïve investor would have to sell his MPI shares at a massive loss of 75% even though he did not buy them at a discount.

In fact, this naive investor would have to wait for many years for the share price of MPI to just get back to RM1.00 while he would have doubled his ICAP investment by 2010 or 2011.

i Capital Newsletter Volume 34 Issue 16

Posted by dumbMoney > 2 months ago | Report Abuse

@i3gambler They changed the benchmark from KLCI because it has been repeatedly pointed out that the latter does not adjust for dividend yield of the component stocks, so it is not a total returns index. The same for the MSCI index, The Index does not include the dividends paid to shareholders in its returns. To invest in the Index itself, investors must invest in funds that track it. These funds do pay the dividends that the companies pay their shareholders. But the calculations of total returns of the index do include dividends, so one has to make the correct comparisons, just price index or total returns.
INDEX PERFORMANCE — PRICE RETURNS (%) (DEC 30, 2022)
ANNUALIZED
1 Mo 3 Mo 1 Yr YTD 3 Yr 5 Yr 10 Yr
Since
Dec 31, 1987
MSCI Malaysia 0.49 7.67 -4.32 -4.32 -4.45 -5.30 -2.24 4.56
MSCI Emerging Markets -2.58 3.74 -17.92 -17.92 -2.60 -2.12 2.70 8.41
FUNDAMENTALS (DEC 30, 2022)
Div Yld (%) P/E P/E Fwd P/BV
3.86 16.38 13.47 1.48
3.36 12.20 11.29 1.57
Again, cut and paste don't line up the columns correctly. For that need to go to the MSCI Malaysia index web page.
There is such a thing as benchmark and period shopping. So switch to whichever gives a more favorable result. Or just compare against the worst performing individual stocks in the market to make one look good. There are a whole lot of stocks that are down more than 75%, so plenty of examples to choose frm.

Posted by i3gambler > 2 months ago | Report Abuse

Let say on 19.10.2005,
If a person is to invest for retirement survival purpose,
Most probably he would go for banks, as all sectors/businesses deal with banks.
Meaning their performance should be the average of all.
For safer, he would select MAYBANK, as ASB is the major shareholder,

Check Yahoo Finance, the adjusted price of MAYBANK on 19.10.2005 was 2.92,
Therefore CAGR from 19.10.2005 to 05.01.2023 is 6.60%.

Check from ICAP website,
Both adjusted NAV and Price on 19.10.2005 are 0.91.
And NAV and Price on 05.01.2023 are 3.34 and 1.97.
Therefore CAGR for NAV and Price are 7.85% and 4.59% respectively.

However, a retiree need to withdraw money periodically,
Therefore if he invest in ICAP, price is more relevant compare to NAV.
Obviously MAYBANK is a better choice for him compare to ICAP.

If that guy invest PBBANK or HLFG instead of MAYBANK on 19.10.2005,
Then the CAGR are more than 11%.

Posted by speakup > 2 months ago | Report Abuse

when icap went ipo, many ppl had high respect for TTB
but the last 5 years, i think most ppl lost all respect for TTB

Posted by dumbMoney > 2 months ago | Report Abuse

@speakup On the contrary, his supporter base is still pretty much intact, just look at the AGM voting results. Some cracks are appearing though, as the outperformance in the early years is wearing thin over time, reverting to the mean.

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2 months ago | Report Abuse

Neoh Soon Keong in his Stock Performance Guide in the printed form of past years has always mentioned that iCap closed end fund's return in the long run can expect to follow that of the market return.

iCAP did deliver alpha in its first few years of listing, soon after, the return has been that of the market return. Given the commissions and fees, investors into any funds should not expect any better. Many funds will underperform the market.

Posted by dumbMoney > 2 months ago | Report Abuse

This is the whole basis for the rise of index funds over actively managed funds. Mathematically, the average fund will need to underperform the market index because of trading costs and management fees.

Posted by JohnD0ugh > 2 months ago | Report Abuse

In last week’s issue of i Capital, I showed some startling facts about the strong performance of icapital.biz Bhd (ICAP). In this week’s issue, I will show why ICAP is one of the most liquid stocks listed on the KLSE and the reasons for ICAP’s success.

1. How liquid are ICAP shares?

ICAP has 140 million shares outstanding. Unlike other listed companies, as a closed-end fund (CEF) or a collective investment scheme, ICAP is not permitted to have any controlling shareholder. Under the Securities Commission's CEF Guidelines, no single shareholder is allowed to own more than 20% of ICAP's shares.

In comparison, despite the fact that Hap Seng Consolidated Holdings Bhd has a massive 2.489 bln shares outstanding, for example, a single controlling shareholder, Gek Poh Holdings Sdn Bhd, directly owns 54.63% and indirectly owns another 8.01% via Hap Seng Insurance Services Sdn Bhd, for a massive combined total of 62.64% as at 31 Mar 2022.

In fact, the top 5 largest shareholders of Hap Seng Consolidated own more than a massive 86% of the company, as at 31 Mar 2022. In contrast, the top 30 shareowners of ICAP only own 42.5% of its issued capital as at 24 Aug 2022. Only 3.44% of its shareholders own 100,000 shares or less of Hap Seng Consolidated, whereas 21.3% of ICAP shares are held by shareowners who each own less than 100,000 shares.

Is Hap Seng Consolidated or ICAP a more liquid stock?

In financial year 2011, Gek Poh Holdings Sdn Bhd directly owns 53.48% and indirectly owns another 8.47% via Hap Seng Insurance Services Sdn Bhd for a combined total of 61.95% as at 30 Mar 2012.

In short, the controlling shareholder of Hap Seng Consolidated hardly increased its shareholdings from 2012 to 2022, but its share price shot up.

In contrast, in financial year 2011, ICAP did not have anyone owning more than 5% of its issued capital or any publicly announced substantial shareholder (that is, 5% or more).
However, by 2022, City of London Investment Management Company Ltd. (CoL) and gang have accumulated a massive total of 32,394,800 shares, or 23.14% of ICAP, and yet the share price of ICAP has hardly moved. Andrew Pegge of Laxey Partners owns 990,000 shares.

To buy 23% plus of any listed company without moving its share price shows how liquid ICAP shares really are and how easy it is for ordinary investors to buy lots of ICAP shares. See it this way - try to buy 23% of Hap Seng Consolidated and see how high its share price would skyrocket.

As I have advised repeatedly, "All truths are easy to understand once you discover them, but you have to discover them first." That buying ICAP shares is difficult is only a myth - I really wonder who created this falsehood and why.

Maybe so that there are no competing buyers?


i Capital Newsletter Volume 34 Issue 17

Posted by Sslee > 2 months ago | Report Abuse

In any other public company if you buy up to 10% you can ask for a Board seat. In Icap they actually ask you to fxxx off if you owned more that 20%. See the different.

By the way did anyone complain buying ICAP shares is difficult??
I too wonder who created this falsehood? And why? I can only guess self praise is no praise at all.

Posted by dumbMoney > 2 months ago | Report Abuse

So iCap shares are not only liquid, but it is one of the strange shares on the exchange where the more COL buys, the lower the price goes, according to the company. I think they got it reversed It is more logical that the cheaper the price, the more one should buy, if it is such a wonderful stock. Otherwise, the earlier logic will have the perverse result that the more COL sells, the higher the price goes. I am totally confused!

Posted by Sslee > 2 months ago | Report Abuse

ICAP motto, "If you can't convince them, then confuse them".

Posted by Thirai Thiraviam > 2 months ago | Report Abuse

In Mr. Bullshit Buffett's world, right is left, more is less, up is down, China is never wrong.

Posted by i3gambler > 2 months ago | Report Abuse

Not liquid at all.
Right now at 10.05AM,
Bid #1: 100 at 1.96
Bid #2: 23 at 1.94
Bid #3: 20 at 1.93
Ask#1: 17 at 2.00
Ask#2: 50 at 2.01
Ask#3: 10 at 2.02

Bid and Ask are 4 sen apart.
Already one hour, not traded yet.
How to buy 1000 small lots?

Posted by Sslee > 2 months ago | Report Abuse

Buying icap share is easy but to sell and make profit is hard.

A stock's liquidity generally refers to how rapidly shares of a stock can be bought or sold without substantially impacting the stock price. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to.

So is icap right in saying:
To buy 23% plus of any listed company without moving its share price shows how liquid ICAP shares really are and how easy it is for ordinary investors to buy lots of ICAP shares. See it this way - try to buy 23% of Hap Seng Consolidated and see how high its share price would skyrocket.

Posted by dumbMoney > 2 months ago | Report Abuse

@Sslee The same situation for iCap, if the shares are liquid, try to sell a 23% block of shares and see how much the price will move? Having been in both the sell and buy side of the business, my possible explanation for the liquidity is that there are plenty of small sellers, but only 1 big buyer, so the buyer can patiently collect as sellers compete to sell, thus lowering the price but with volume. But the same will not work in reverse. If the big buyer turns seller and put say a million shares on the board, all the small buyers will run away, along with the liquidity. The only consolation is that COL has such a big block that it cannot be disposed off in the market without taking a big bath, so can only move forward, but the court case is the road block at the moment, a stalemate situation.

Posted by Sslee > 2 months ago | Report Abuse

The more I read to understand what actually icap mean by liquid the more I get confuse. That show how good icap in confusing people.

Posted by Income > 2 months ago | Report Abuse

iCap Birdie. Meaning for ever can’t enjoy spillage but can look at big whale relaxing in the sun.

Posted by Income > 2 months ago | Report Abuse

Birdie for ever Cap already. Haha

Posted by dumbMoney > 2 months ago | Report Abuse

@Sslee Small individual investors need some sort of a 'guru' to guide them, but sophisticated and institutional investors are knowledgeable and experienced enough to form their own independent opinions. The latter know that there is no such thing as a free call option that has no strike price, and that the KLCI is not a total returns index, just two things that small investors may not be aware of.

Posted by dumbMoney > 2 months ago | Report Abuse

Look up Black-Scholes Option Pricing Model and Center for Research in Security Prices for more information on the above two examples and where I am coming from.

Posted by dumbMoney > 2 months ago | Report Abuse

For someone who has been taught options pricing formula right from its beginning by the founder himself, it makes me cringe to see such a statement like cash is a free call option from a professional money manager.

Posted by dumbMoney > 2 months ago | Report Abuse

Viewpoints in finance can be subjective, but definition of a call option is not one of them.

Posted by observatory > 2 months ago | Report Abuse

I like reading ICAP reports.

In the report just released, the manager trumpeted " icapital.biz Berhad has achieved a superior NAV and share price returns of 15.74% and 9.35% respectively for the two years ended 11 January 2023"

Normally investment funds will present their 1, 3 and 5 year return. Seldom we come across fund managers boasting their 2-year return, and also not consistently reporting their performance.

In ICAP case, it could only mean one thing, that the 1-year return is bad!

So it's not a surprise when I found out:
12-Jan-20222, NAV RM3.55, share price RM2.18
11-Jan-2023, NAV RM3.38, share price RM1.97
The one year return of NAV and share price are - 4.8% and -9.6%

As a rule of thumb, even good funds underperform one in every three years. Nothing to be shamed of. But moving the goal post to hide negative returns speaks volume about this manager's insecurity!

Posted by dumbMoney > 2 months ago | Report Abuse

A 10-year share price returns would have under-performed against bank FD rate, so it all depends on the period selected to make things look good. Like they say, shiok sendiri!

Posted by Income > 2 months ago | Report Abuse

Kita Con by CEO for donkey years?????


Posted by dumbMoney > 1 day ago | Report Abuse

A 10-year share price returns would have under-performed against bank FD rate, so it all depends on the period selected to make things look good. Like they say, shiok sendiri!

Posted by Income > 1 month ago | Report Abuse

May you enjoy a happy and prosperous new year, as well as lots of special times with your loved ones. Happy 2023 Chinese New Year!

Posted by JohnD0ugh > 1 month ago | Report Abuse

2. Why icapital.biz Bhd (ICAP) succeeds

There are many good reasons why ICAP has succeeded and why it will continue to do so.
ICAP does not engage in market timing, which is timing when bear and bull markets start and end, or predicting when a recession and recovery start and end. Why ?

It is generally difficult to be able to time the stock market and/or economic cycles accurately. Consequently, market timing cannot produce sustained superior investment results.

As explained at the 2022 Investor Day of icapital.biz Bhd, successfully buying low and selling high in terms of stock price over a prolonged period is extremely difficult, if not impossible.

ICAP deploys Tan Teng Boo's Bamboo value investing style. Why ?

It has been proven over a long period of time, it makes the most business sense, and more importantly, it produces a high return with low risk, which is the opposite of high risk and no return.

Unfortunately, many investors take high risks, thinking they will lead to high returns. Also, as explained at the 2022 Investor Day of icapital.biz Bhd, the bamboo value investing philosophy is a key pillar of Tan Teng Boo's investment framework. It allows an investor to be brave in a bear market and to be frightened in a bull market.

Buying low and selling high in terms of share price cannot produce sustainable superior performance.

Buying low and selling high in terms of business valuation, which is the essence of our bamboo value investing philosophy, produces sustained superior performance.

Let me use the example of Top Glove again. In last week's i Capital, we showed how bullish the so-called analysts were as the share price of Top Glove was skyrocketing. This week, we show what these analysts, who were essentially market-timers, were saying when the share price of Top Glove was plunging.

By Jun 2022, when the stock price of Top Glove had plunged nearly 90%, there were massive 301 'Sell' recommendations, and only 21 'Buy' ratings. By Nov 2022, most of the analysts had disappeared, leaving their poor clients stuck in Top Glove as 'long-term' investors.

If only these thousands of suffering investors had bought the so-called illiquid CAP shares instead. Well, as I have always advised, value investing is great as it forces one to think about the margin of safety. When an investor does this, it leads to a low-risk, high-return investment.

i Capital Newsletter Volume 34 Issue 17

Posted by Income > 1 month ago | Report Abuse

Will Stock Markets "Jump" in the Year of Rabbit?

The Water Rabbit cycle, which last occurred 60 years ago in 1963, is associated with strong performance in the stock market as seen by the 20.8% and 21.5% jumps in the Dow Jones Industrial Average and S&P 500 respectively. However, it is noted that past performance is not a guarantee of future performance and investors should be selective in their investments during a volatile market. The guide "Key Investment Themes and Outlook 2023" is recommended for those looking to invest in 2023.

Posted by dumbMoney > 1 month ago | Report Abuse

Taking a page out of iCap's playbook of comparing with Top Glove, I too can make similar comparisons against other funds in the local market. Eastspring Investment Small Cap Fund, an unit trust managed by Eastspring Investment Bhd, a subsidiary of Prudential PLC, was established on 29/5/2001, but with the fsmone website, one can calculate the fund's total NAV returns for the same period as iCap, i.e. from 19/10/2005 to 30/12/2022, which came up to 602.39%, so an initial $1 investment would have grown to $7.02. Initial sales charge is 1.5%, and annual management fee is also 1.5%, same as iCap's. Unlike iCap's theoretical NAV, this fund's NAV is also the redemption price payable by the fund, being an unit trust. Taking another example, Areca Equity Trust Fund, managed by Areca Capital Sdn Bhd, which was established on 23/4/2007, around one and half year later than iCap. The total returns since launch date is 449% (as advertised in this week's Edge weekly), which means the same $1 investment is now worth $5.49. This fund has a higher initial sales charge of up to 3%, and a 1.9% annual management fee, which while higher than iCap's 1.5%, is already accounted for in the total returns, so no longer a factor. To be fair, the 29.5 sen dividend payouts of iCap in the past need to be added back to its year end NAV of $3.27 =$3.565 for comparison. Enough said.

Posted by dumbMoney > 1 month ago | Report Abuse

More importantly, the NAV of these unit trusts are also the exit price for their investors, as there is no redemption charges. But for iCap investors, they can now only exit their investments at the market price of around $2, which is at a huge discount to the NAV, making the comparisons even worse .

Posted by Income > 1 month ago | Report Abuse

https://www.facebook.com/reel/520025816851210?fs=e&s=TIeQ9V&mibextid=0NULKw

Posted by dumbMoney > 1 month ago | Report Abuse

Correction, the exit price comparison for iCap also needs to be adjusted for the dividends paid, so it should then be around $2.295 and not $2 in the earlier post.

Posted by Income > 1 month ago | Report Abuse

I Cap = I cap your Rm for longer term. Sad

Posted by dumbMoney > 1 month ago | Report Abuse

It is claimed that iCap is a low risk high returns investment. What has been missing from the low risk is the elephant in the room, execution risk when it comes time to sell, what is the share price relative to the NAV then? Losing a ringgit on the price discount to NAV is not a risk? An unit trust has no such risk because the redemption price is the NAV.

Posted by CharlesT > 1 month ago | Report Abuse

If u are looking for highest FD interest then ICAP is the right choice. U put yr money in ICAP n TTB will help you to invest in the highest FD in town.

TTB is an expert in FD Investment as he has more than 10 years experience in so.....

Posted by speakup > 1 month ago | Report Abuse

TTB the FD guru

Posted by CharlesT > 1 month ago | Report Abuse

U invest in ICAP then TTB invest in FD....

He gets RM6M+ fee in return every year n u get free Angpao package n annual investment forum in return.

Win Win situation n everybody is happy

Posted by MG9231 > 1 month ago | Report Abuse

Well said Charles T, happy new year to you

Posted by dumbMoney > 1 month ago | Report Abuse

@Charles T Maybe that's what they mean, iCap is a low risk high returns investment, for CD, but not for the others.

Posted by CharlesT > 1 month ago | Report Abuse

Posted by MG9231 > 6 hours ago | Report Abuse

Well said Charles T, happy new year to you

Same to you MG9231...nowadays hard to see old timer here