Posted by JohnD0ugh > 1 month ago | Report Abuse

3. Why icapital.biz Bhd (ICAP) succeeds

As a closed-end fund, the fund manager of ICAP, unlike the ubiquitous open-end unit trust funds, does not have to worry about redemptions (outflows of funds) _or inflows of new funds. Why is this feature such an advantage?

The fund manager of an open-end unit trust fund cannot predict and control the timing and size of such fund inflows and outflows, and this forces the said fund manager to act in ways contrary to sound investing.

There will be greed and heavy inflows when the stock market or a stock is bullish (this is precisely when stocks can generally be overvalued). This forces the fund manager of an open-end unit trust fund to buy stocks when caution is called for.

There will be fears, heavy redemptions, and an outflow of funds when the stock market or a stock is bearish (when stocks can generally be undervalued). This forces the fund manager of an open-end unit trust fund to sell stocks when the risks are low and when future returns are high. This is the time when investors and their fund manager should be brave.


i Capital Newsletter Volume 34 Issue 17

Posted by dumbMoney > 1 month ago | Report Abuse

If CEF is so good, it begs the question why there is only 1 CEF in the country vs so many unit trusts and ETF's? It is the price discount factor, which management has conveniently washed their hands off.

Posted by speakup > 1 month ago | Report Abuse

TTB already spoil the market appetite for CEF. Nobody will want invest in CEF after seeing icap performance over the years

Posted by dumbMoney > 1 month ago | Report Abuse

@speakup The 3 Big Banks in Singapore and PNB here rather wound up their CEF and property trust respectively, even though they have the financial resources to support the share price if necessary, because those units are immaterial to their scale of operations, so better to have happy shareholders than disgruntled ones. With iCap, majority shareholders are happy with the status quo, so you and I can beef all about it here for all TTB cares.

Posted by fong7 > 1 month ago | Report Abuse

icapital actually hired a writer (JohnD0ugh) to defends in this forum? haha!

Posted by fong7 > 1 month ago | Report Abuse

icap's NAV discount spread has been getting bigger and bigger. It's easy to see how market evaluate this close end fund's performance. Besides, we never really hear anything TTB said about icap, we only hear him talks about his couple new China funds. Icap is basically abandon when i look at it.

Posted by firehawk > 1 month ago | Report Abuse

hired？ isn't that himself?

Posted by stockraider > 1 month ago | Report Abuse

Better close shop loh!

Posted by dumbMoney > 1 month ago | Report Abuse

When iCap was first listed, management was on record of projecting a 15-20% CAGR and the shares traded at a premium. We don't hear of such numbers anymore and the premium becomes a discount. Stale bulls liquidation?

Posted by JohnD0ugh > 1 month ago | Report Abuse

4. Why icapital.biz Bhd (ICAP) succeeds

Linked to reason number 3 is the fact that ICAP can control and have different levels of cash; ICAP does not have to deal with the inflow and outflow of funds, unlike open-end unit trust funds.

ICAP's fund manager is really the fund manager. In the case of unit trust funds, the underlying unit holders in aggregate are the real fund manager.

5. Why ICAP succeeds

Capital Dynamics, the fund manager of ICAP, is owner-operated. The branding of i Capital and Capital Dynamics is very precious to us.

We care a lot about individual owners - over the years, a special kinship has developed. In fact, it is the primary reason ICAP was set up in the first place in 2005 - to provide sound long-term investment to individual investors.

Since its conceptualisation, we have given our heart and soul to ICAP with integrity. For example, the IPO fund raising in 2005 was purposely done by Tan Teng Boo and Capital Dynamics - this saved ICAP around RM2 mln in fees in 2005. ICAP publishes a highly cost-effective annual report and IPO prospectus.

ICAP has unique Annual General Meetings, which have always been held on a Saturday. About 50% of the Investor Day expenses are borne by Capital Dynamics, which also provides the staff in conducting such laborious events.

Integrity - the most important of the 3 'i's for both i Capital and Capital Dynamics. Integrity is not the same as honesty. A crook can honestly tell you he or she is a crook. Integrity is doing the right thing, even when no one knows about it.


i Capital Newsletter Volume 34 Issue 17

Posted by dumbMoney > 1 month ago | Report Abuse

What about the millions spent on the aborted dual listed fund without most of the shareholders being aware of the amount until it was reimbursed, and that as only a footnote in the annual report?

Posted by speakup > 1 month ago | Report Abuse

because of icap bad performance, no other funds want to list closed end funds. no demand

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 1 month ago | Report Abuse

JohnD0ugh

You appear like a spokesman for iCap in i3.

Do you know how many initial investors of iCap closed end fund who bought in 2005 are still holding to their stocks today?

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 1 month ago | Report Abuse

JohnD0ugh

For those who have been following ttb for the last 20 years, how do you assess his integrity?

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 1 month ago | Report Abuse

When iCap was launched as a closed end fund, ttb went round and promoted the advantages of a closed end fund. He kept the cost of listing very low for the initial investors' benefit.

Surprisingly, his later managed funds were open ended funds.

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 1 month ago | Report Abuse

As a fund manager, is ttb different from many others? Yes and no. But, it is of course not much different from the others, in growing the Asset Under Management under him over the years through launching of many funds.

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 1 month ago | Report Abuse

ttb did explain to his investors or business owners about the dual listing he was spending a lot of time on. I think he mentioned dual listing either in Hong Kong or Singapore. After much time spent, this did not materialised. Yes, the cost incurred and who finally had to carry the bill was not shared openly and came as a surprise indeed.

Posted by dumbMoney > 1 month ago | Report Abuse

Lots of explanation have been offered for the cash reserves, but no explanation or justification has been offered for the millions spent on the failed dual listing exercise. How was that supposed to benefit the fund or the shareholders? Why, because no one bothered to ask?

Posted by dumbMoney > 1 month ago | Report Abuse

@speakup please check your message inbox, the green button on top of the page.

Posted by speakup > 1 month ago | Report Abuse

I was merely asking a Question

Posted by Just88 > 1 month ago | Report Abuse

Must the company table a resolution in 2025 to dissolve the CEF ?

Posted by dumbMoney > 1 month ago | Report Abuse

@just88 Tabling the resolution is one thing, getting it passed is another.

Posted by Just88 > 1 month ago | Report Abuse

dumbMoney, I don't see why minority shareholders won't want to dissolve the fund and make huge immediate profit unless something is done to narrow the discount soon enough.

Posted by Just88 > 1 month ago | Report Abuse

Judging from pass AGM voting results, TTB controls less than 30% and was decreasing over time. COL is only short of 10m shares to bring down the BOD.

Posted by Just88 > 1 month ago | Report Abuse

TTB is right that the existence of COL is the reason for the large discount. This is cited by one of the early research papers. In this case, the reason is obvious. COL wants to buy cheap and induce disgruntled minority shareholders to vote against the BOD.

Posted by Just88 > 1 month ago | Report Abuse

The point now is whether it is wise to buy now in anticipation that the discount will narrow when approaching year 2025.

Posted by dumbMoney > 1 month ago | Report Abuse

@Just 88 While COL may want to buy cheap, they cannot induce shareholder to sell cheaply if they don't want to. It has always been willing buyer willing seller, unless COL's buying is so negative for the company and ther shareholders, as alleged by management, that they are induced to jump ship at a big discount.

Posted by dumbMoney > 1 month ago | Report Abuse

@Just 88 Did you attend the recent company AGM? COL was painted as public enemy number one and the crowd cheered. Other than COL's own big block, the vote counts were one sided. That's the reality at the moment.

Posted by dumbMoney > 1 month ago | Report Abuse

If you are counting on COL to come to your rescue, just bear in mind that you are partly funding the legal costs to block their further purchases.

Posted by Just88 > 1 month ago | Report Abuse

dumbMoney, Thank you for your comments. However, I do not understand why it is unwise to buy now with intention to dissolve the fund for a big arbitrage gain.

Posted by dumbMoney > 1 month ago | Report Abuse

The current TTB supporters have been with him all this while and are unlikely to change, so they are like his fixed deposits, and until COL is allowed by the court to buy, you will need others to make up the numbers you will need. If you buy now, it is a risk arbitrage trade, not a sure thing. At the current deep discount, the downside is quite limited, mainly opportunity cost holding the shares. When it comes to a vote, the undecided majority will determine the outcome, not just the 10 million share margin indicated at the AGM.

Posted by dumbMoney > 1 month ago | Report Abuse

A risk arbitrage is so named because the price difference can only be realised if the expected event can be completed, e.g. a takeover, corporate restructuring etc. A good example of a failed exercise is the selective capital reduction of MAA, which was rejected by shareholders and the share price is now far below the offer price then. Punters who took a position then would have taken a big hit if not baled out already. Similar situation here if resolution fails.

Posted by dumbMoney > 1 month ago | Report Abuse

So if the 2025 or earlier liquidation resolution is defeated and COL decides to cut losses and bail out along with other stale bulls, where do you think the share price will be? This is the main deterrent acting on the share price at the moment.

Posted by dumbMoney > 1 month ago | Report Abuse

It is an existential fight for TTB because if the courts decide in COL's favor, there is nothing to stop the latter from buying more to gain control of the board, so the litigation will go all the way to the Federal Court if necessary and this will take years. Of course things can still change if some other vulture funds come along once they smell blood in the water and take up the slack from COL, like what happened to Amanah Small Cap fund last time.

Posted by dumbMoney > 1 month ago | Report Abuse

What induced shareholders to sell is the 'lost decade' where the share price stayed stagnant from 2012 to 2022. Is this a low risk high returns investment? People buying the shares now are mainly doing risk arbitrage.

Posted by JohnD0ugh > 1 month ago | Report Abuse

Two weeks ago, I showed some startling facts about the strong performance of icapital. biz Bhd (ICAP). In last week's issue, contrary to some misconceptions, I showed why ICAP is one of the most liquid stocks listed on the KLSE and shared the reasons for ICAP's success. In this final part, I will explain a proven strategy to manage the NAV discount or premium of ICAP.

1. The type and quality of shareowners matter

Few investors realised that the most important factor in determining the share price performance of a listed company, whether listed locally or overseas, is the type and quality of shareowners or shareholders that the listed company possesses. The right type will produce superior and sustainable business and share price performance; the wrong type will produce the wrong results. At this level, one can look at them from 2 aspects : institutional versus individual, and young versus old. I will look at 4 case studies to illustrate my point.

Posted by dumbMoney > 1 month ago | Report Abuse

Shouldn't the shareholder who buys the share at a 40% discount be the smarter one than the seller who sells to him? Put it another way, who is the smarter buyer, the one who buys at 40% discount or the one who buys at 20% discount? The average shareholder is getting smarter now, I think, so what's the complaint?

Posted by Income > 1 month ago | Report Abuse

https://www.facebook.com/reel/667730898459097?mibextid=0NULKw&fs=e&s=TIeQ9V

Posted by i3gambler > 1 month ago | Report Abuse

If a counter is liquid, many investment banks would produce analysis reports on it.
I could not find any report on ICAP here in i3.

Posted by Just88 > 1 month ago | Report Abuse

Verdict today ?

Posted by speakup > 1 month ago | Report Abuse

What verdict? Please share. Tq

Posted by Just88 > 1 month ago | Report Abuse

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3328305

Posted by speakup > 1 month ago | Report Abuse

What the implications?

Posted by Just88 > 1 month ago | Report Abuse

TTB is trying to stop COL from increasing its stakes in ICAP

Posted by speakup > 1 month ago | Report Abuse

at 1.98, the discount is a MASSIVE 75% from is NAV of 3.47!
MASSIVE 75%!

Posted by speakup > 1 month ago | Report Abuse

https://www.kiplinger.com/investing/cefs/best-closed-end-funds
https://seekingalpha.com/article/4548417-my-top-10-closed-end-fund-holdings-october-2022

compare Icap to the above CEFs, their discount <20%. But Icap discount is a MASSIVE 75%! How is this possible???? Anybody can explain?

Posted by dumbMoney > 1 month ago | Report Abuse

If leave to appeal to the Federal Court is refused, end of the legal challenge. The legal costs payable to COL may be nominal, but that charged by the company's counsel will be much more substantial if a top tier law firm is engaged.

Posted by observatory > 1 month ago | Report Abuse

Haha, will you buy just because there is a massive discount to NAV? What if the discount grows even larger after purchase?

Posted by speakup > 1 month ago | Report Abuse

how on earth can the discount get sooooooo massive? this is probably the largest discount for a CEF in the world! malaysia boleh!

Posted by observatory > 1 month ago | Report Abuse

Head the manager wins, tail the shareholders bear the cost!