ICAPITAL.BIZ BHD

KLSE (MYR): ICAP (5108)

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Last Price

1.98

Today's Change

0.00 (0.00%)

Day's Change

1.97 - 1.98

Trading Volume

39,500

Overview

Market Cap

277 Million

NOSH

140 Million

Avg Volume (4 weeks)

19,227

4 Weeks Range

1.91 - 2.05

4 Weeks Price Volatility (%)

50.00%

52 Weeks Range

1.87 - 2.44

52 Weeks Price Volatility (%)

19.30%

Previous Close

1.98

Open

1.98

Bid

1.98 x 500

Ask

1.99 x 6,000

Day's Range

1.97 - 1.98

Trading Volume

39,500

Financial Highlight

Latest Quarter | Ann. Date

31-Aug-2022 [#1] | 11-Oct-2022

Next QR | Est. Ann. Date

30-Nov-2022 | 24-Jan-2023

T4Q P/E | EY

-198.71 | -0.50%

T4Q DY | Payout %

0.00% | 0.00%

T4Q NAPS | P/NAPS

3.20 | 0.62

T4Q NP Margin | ROE

-17.51% | -0.31%

Market Buzz
Company Profile

Sector: CLOSED END FUND

Sector: CLOSED END FUND

Subsector: CLOSED END FUND

Subsector: CLOSED END FUND

Description:

icapital biz Bhd is a Malaysian closed-end fund. The primary investment objective is a long-term capital appreciation of its investments. The company mainly invests in undervalued companies which are listed on the Main Market of Bursa Malaysia Securities Berhad and the ACE Market of Bursa Securities. It also invests in cash deposits. The revenue generated by the company includes interest income, dividend income, and other income.

Discussions
5 people like this. Showing 50 of 3,728 comments

dumbMoney

The last time the share traded at a premium to its NAV as in 2008, so for the greater part of its existence, the share trades at a discount. Is this going to be permanent, only time will tell, but for the Big 4 Singapore bank managed closed end fund and the only other CEF fund listed here, shareholders and management decided that enough is enough and went into voluntary liquidation, so that everyone, including the banks themselves, as major shareholders, can exit at NAV. While not a CEF, AHP2, a listed property trust managed by PNB, the largest fund manager in the country besides EPF, also self liquidated because of the persistent discount. For these funds, the market have spoken and management decided not to fight it.

1 month ago

JohnD0ugh

Last year’s AGM was held on 20th November 2021. In the question and answer session, I spent quite a fair bit of time explaining why share buyback does not and will not work for icapital.biz Berhad.

Let me update our share owners on this unproductive matter.


I used the example of Top Glove’s loss-making share buyback in last year’s AGM. On 19 November 2021, its closing price was RM2.31. On 30 November 2021, it closed at RM2.92. On 15 September 2022, Top Glove’s share price closed at RM0.765.

In short, since then, Top Glove’s share price has collapsed a further 67% and 74% respectively.

A share buyback of RM1.0 billion by Top Glove, for example, would have seen a further massive loss of RM670 million or RM740 million. In April 2022, Starbucks, the world’s leading coffee chain, suspended its share buyback program as Howard Schultz takes command again.

Schultz explained that the share buyback programme is suspended so that Starbucks can “invest more profit into our people and our stores.” Starbucks like Amazon.com and Apple Inc has seen a rising worker rights campaign that has seen many of their store workers voting to unionize.

In short, share buyback is destroying Starbucks in the long-term.


i Capital.biz Berhad 2022 Annual Report

1 month ago

observatory

Benjamin Graham also wrote,
" Given two companies in the same general position and with the same earning power, the one paying the larger dividend will always sell at the higher price"

"Assuming that the reported earnings were actually available for distribution, then stockholders in general would certainly fare better in dollars and cents if they drew out practically all of these earnings in dividends."

"Although we have concluded that the payment of a liberal portion of the earnings in dividends adds definitely to the attractiveness of a common stock, it must be recognized that this conclusion involves a curious paradox. Value is increased by taking away value. The more the stockholder subtracts in dividends from the capital and surplus fund the larger value he places upon what is left."

In other words, Graham observed almost a century ago that the market prefers companies which return idle cash to shareholders. The more idle cash is returned to shareholders, either via dividends, or share buyback (if the stock is undervalued), the more valuable the company becomes. The shareholders will enjoy the double benefits of returned cash and a higher share price assigned by the market.

Graham's wisdom then has become common sense nowadays. The only problem is the self proclaimed Graham's disciple doesn't walk the talk.

1 month ago

dumbMoney

@observatory You forgot to mention that WB's Berkshire also buys back shares below a certain threshold, and that is supposed to destroy shareholders value? A higher share price means a lower cost of equity capital. For the same required ROI margin, a company with a lower cost of equity capital can consider investments with a lower absolute ROI, which also usually means lower risks, for the benefit of shareholders.

1 month ago

JohnD0ugh

Once again, despite a very tough and rough environment, icapital.biz Berhad has achieved a superior NAV and share price returns of 19.60% and 7.71% respectively for the two years ended 30 September 2022.

Both have strongly outperformed the 12.77% plunge in the bellwether MSCI Malaysia index. Remember, icapital.biz Berhad is ideal for investors looking for a low-risk, high-return fund.

With over RM150 million still in cash reserves and Capital Dynamics’ time-proven value investing philosophy, it is an excellent time to invest more in icapital.biz Berhad.

This year, the highly popular and productive Investor Day will be back. It will be held on Saturday, 26th and Sunday, 27th November at the KL Convention Centre. Learn for yourself why icapital.biz Berhad works.

Finally, let me repeat what I think is a very important point to my fellow Malaysian shareowners - do not let any investor who refuses to think and act like a share owner destroy a precious gem like your Fund.

Do participate in its coming Annual General Meeting and make your ownership counts. It can help narrow the NAV discount.

i Capital.biz Berhad 1Q2023 Report

1 month ago

observatory

"Do participate in its coming Annual General Meeting and make your ownership counts. It can help narrow the NAV discount."

How does participation in AGM help narrowing the NAV discount? By indoctrinating and firing up shareholders so that they will buy the shares up?

It sounds like religion. When has value investing turned into a faith based investing?

1 month ago

dumbMoney

The biggest shareowner's persistent buying has been stopped by the company from buying more shares and here, TTB is asking people to buy more shares. More like election campaigning.

1 month ago

dumbMoney

If the company's performance has been as good as claimed, it begs the question of why the persistent discount, when it should be trading at a premium instead? What gives? Shareowners don't know what's good for them or there is a trust deficit?

1 month ago

drken91

sorry to interrupt your highly intellectual Buffet-esque discussion,
may I know if anyone knows what other stocks are still in iCapital's portfolio? if got link, pls share..
much appreciated, tq

1 month ago

JohnD0ugh

In last year’s annual report, I wrote about Scottish Mortgage (SMT), an investment trust or a closed-end fund listed on the London Stock Exchange and a constituent of the FTSE 100 Index.

For some investors who kept asking about the NAV discount of icapital.biz Berhad and whether your Fund has an expiry date, SMT offers plenty of lessons to learn from.

SMT was launched in 1909, about 113 years ago and is still going strong with total assets of US$11.36 billion (icapital.biz Berhad is only 16 years young). It once traded at a persistent discount to its NAV.

After around twenty years, its NAV discount disappeared in 2013, endowing
its share price with a premium to NAV before trading around parity.

After I wrote about SMT in the said annual report, some uninformed investors, especially those from overseas, say that icapital.biz Berhd should follow SMT by buying back its own shares.

Was the discount narrowing of SMT due to its share buyback and/or dividend payment ? The simple answer is no.

The move from discount to premium was primarily driven by increased demand from retail investors and an evolving ownership.

For decades, a significant portion of SMT was owned by institutional investors, mainly UK pension schemes. By the end of the last century, these investors had become disengaged with the investment trust structure as new open-ended pooled vehicles allowed greater operational efficiencies.

They were persistent sellers which drove the share price to a persistent discount to NAV. From 2010, SMT was more proactively marketed to retail investors, who in the UK had begun taking greater control over their own finances, via savings platforms.

Consequently, the SMT shares owned by institutions declined substantially, from 54% in 1994 to only 17% in 2021. At the same time, share ownership by individuals jumped.

It was the massive increase in ownership by individual investors that essentially removed the NAV discount of SMT.

Shareholders, existing and future ones, ultimately bear the responsibility of determining the market price of a listed company. So, the type and quality of shareholders matter.


i Capital.biz Berhad 2022 Annual Report

1 month ago

observatory

The Forbes article below explains why closed-end funds often trade at a discount to their NAVs.
https://www.forbes.com/sites/simonmoore/2020/04/12/wider-closed-end-fund-discounts-have-historically-been-a-good-sign-should-you-bite/?sh=1eb964e050a7

Check out this closed-end fund screener mentioned in the article.
https://www.cefconnect.com/closed-end-funds-screener

It lists a few hundred closed end funds. Sort these funds by the Discount/ Premium column. It shows that about 90% of the closed end funds suffer from NAV discounts!

What is even more interesting is out of the few hundred funds, only one fund called DMA (Destra Capital Advisors LLC) suffers from a greater NAV discount than iCAP!

At the time I sorted the list, DMA’s discount was 41%. Based on latest Bursa announcement, ICAP discount was 1 – 1.96/3.23 = 39%.

In other words, if ICAP were to be included in the list, it would be the second worse performer in premium/ discount out of the few hundreds!

Just before anyone concludes that ICAP offers the opportunity where NAV discount may narrow over time, read the last paragraph which says,
“So if you see a closed-end fund trading at an unusually high discount there may be an opportunity. Discounts and premiums do appear to be mean reverting. Unfortunately these opportunity often comes at times of high market panic, such that other opportunities may be large too. Plus these trades do involve some risk and cannot be fully arbitraged in a riskless way. Also, a final note of caution is that closed-end funds can move systematically over time. For example, in the early 1970s closed-end fund discounts in the US and UK exceeded 30% on average for several years. So these discounts don’t necessarily always close as rapidly as an investor might hope.”

1 month ago

dumbMoney

Haha, shareowners, here you heard it, the deep share price discount is all your fault. It is like you get the government you voted for, no one else to blame but yourself.

1 month ago

RealValueInvestor

Thanks observatory... DMA is a similar market cap to ICAP but its holdings are less liquid that ICAP's being real estate and unquoted funds, so it SHOULD trade on a wider discount than ICAP!

ICAP's discount rather than being the fault of shareholders is the fault of the board for delegating the management of the discount to the manager, who likes to blame shareholders and continues to pursue a method to close that discount that hasn't worked for all the years he has tried it.

1 month ago

dumbMoney

@observatory No need to look so far. Historically, there were 4 CEFs (later became 3 through the merger of UOB and OUB) managed by the Big 4 local banks in Singapore, and the Amanah Millenia Fund here, managed by MIDF Amanah Asset Management Bhd, plus a property trust AHP2, managed by PNB, the largest unit trust management in the country. All were trading at a persistent discount and amid shareholders discontent, management decided to proactively let the shareholders decide on the fate of their investment by calling for a vote on the voluntary dissolution of their funds. All were liquidated this way and no more hassle and distraction for the managers, who all got bigger other businesses to run. Here at iCapital, COL is the only group who collectively have enough votes to move such a resolution and that is why they are taken to court to stop them buying more shares. Let's see how COL is going to vote this coming AGM. If they can defeat any of the resolutions, the writing is on the wall.

1 month ago

observatory

I analysed past AGM votes on resolution of directors’ appointment. Over the years the number of shareholder votes supporting directors’ appointment has declined while the Against votes has kept increasing (presumably most are from COL)

Year No. of Shares For No. of Shares Against
2021 43,623,877 (58%) 31,099,317 (42%)
2020 42,332,043 (58%) 30,267,507 (42%)
2019 43,829,446 (61%) 27,963,500 (39%)
2018 46,261,889 (62%) 28,389,753 (38%)
2017 44,554,250 (64%) 24,832,500 (36%)
2016 57,089,178 (71%) 23,646,300 (29%)
2015 60,198,263 (75%) 20,281,250 (25%)
2014 47,978,106 (73%) 17,777,592 (27%)

Hence the urgency to stop COL.

With 140 million shares outstanding, a full 47% have not bothered to vote. If shareholders don’t care to defend their own interests, the current sorry state could continue for many more years.

1 month ago

RealValueInvestor

Berkshire Hathaway Annual - Page K-31

Common Stock Repurchase Program
Berkshire’s common stock repurchase program permits Berkshire to repurchase its Class A and Class B shares at any time that Warren Buffett, Berkshire’s Chairman of the Board and Chief Executive Officer, and Charles Munger, Vice Chairman of the Board, believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined. Repurchases may be in the open market or through privately negotiated transactions.

In the last 3 months of 2021 alone they repurchased own shares at a cost of over $6.7billion or circa 1% of shares in issue!

Now that is responsible stewardship!

1 month ago

dumbMoney

@observatory I give you a real case study of shareholders' apathy. When minority shareholders of AHP2, a then listed property trust managed by PNB, called for an EGM to vote on the voluntary liquidation of the trust, PNB affiliated funds were prohibited from voting because of the related party clause in the trust deed. There was a minimum quorum clause in the trust deed which was 25%, and excluding PNB related shareholders, there was not enough members present or in proxies to make up the quorum and the resolution would not be passed. So PNB, even though the trust can escape liquidation because of this lack of quorum, signed in as attendee and made up the required numbers, and even though they cannot vote, they decided not to stand in the way of the outside shareholders and let them decide. So the resolution was carried. Why PNB did that, to allow their fund to be liquidated? Because it is the biggest shareholder and the liquidation allowed them to get out of a perennial discount and realised full value for their investors, and the trust was of no importance to them in their greater scheme of things, and instead of a loss of face, they gained brownie points from investors for corporate governance, acting in the best interest of their investors. How I knew all this? Because I was there.

1 month ago

dumbMoney

Prior to the AHP2 announcement, the share price was hovering around 50 sen. The final realised returns to shareholders was around $1, so happy ending all round. Years later, AHP, the sister company of AHP2, was also trading at a persistent discount of more than 30%, but this time, PNB wised up, instead of waiting for shareholders to try another liquidation proposal, they proactively took the company private at the issue price and close to NAV. Unlike other major shareholders of discounted listed companies who try to 'steal' the company from minorities with unfair and unreasonable low ball offers, PNB did the right thing with a fair and reasonable offer. So no more disgruntled minorities, and PNB no longer need to mark to mark its unlisted investment to market.

1 month ago

dumbMoney

And who says management and shareholders cannot do anything about deep price discount?

1 month ago

JohnD0ugh

The strategy of attracting more individual investors has been copied by Pershing Square Holdings (PSH), the 2nd largest closed-end fund in the world.

Despite massive share buyback and regular dividend payments, Pershing Square Holdings encountered the same NAV discount issue.

The Board of PSH “believes that the best way to close the discount is for PSH to attract long-term investors by continuing to deliver strong investment performance over time. We can also do more to increase awareness of our performance and our strategy among investors. In recent years the Board has actively taken steps to broaden our investor base by securing a listing on the London Stock Exchange. Our subsequent elevation to the FTSE 100 index has increased the visibility of PSH to investors. In 2021, we increased our marketing efforts in the U.K., specifically to retail investors and the “platforms” they use, and remain focused on reaching a broader array of potential investors” (2021 Annual Report of PSH).

In March 2021, Pershing engaged Frostrow to cultivate demand across UK-based wealth managers, retail/adviser platforms, targeting individual investors.

i Capital.biz Berhad 2022 Annual Report

1 month ago

RealValueInvestor

JohnDough thinks he invented "the strategy of attracting more individual investors" as well as value investing!

1 month ago

RealValueInvestor

https://pershingsquareholdings.com/performance/net-asset-value-and-returns/

And the strategy is working nearly as poorly for PSH as it is for ICAP. End October Discount £35% and that's with ongoing buybacks!

1 month ago

RealValueInvestor

Scottish Mortgage Trust Annual 2022, page 7 -

"The Board recognises that it is in the long term interests of shareholders to manage discount/premium volatility. Whilst the Board believes that the primary driver of discounts over the longer term is performance, the relationship between the Company’s NAV and share price can be impacted in the shorter term by an imbalance of buyers and sellers in the market.

The Board does not have formal discount or premium targets at which shares will be bought back or sold respectively, as it believes that the announcement of specific targets is likely to hinder rather than help the successful execution of a buyback/issuance policy. However, it will undertake to aid the efficient functioning of the market in its shares in normal market conditions, by acting when such a significant imbalance in supply and demand for the Company’s shares exists.

In furtherance of this policy, during the year the Company bought back a total of 12,437,319 shares into treasury. Between 1 April and 16 May 2022, 81,088 shares were bought back. During the
year the Company issued from treasury 34,950,000 ordinary shares at a premium to the net asset value. Between 1 April and 16 May 2022, no further ordinary shares were issued."

Why does TTB chose to ignore this?

https://stpukswebsharedmedia.blob.core.windows.net/mws/5f0cmds2/638012677305061178baillie-20gifford-20scottish-20mortgage-20investment-20trust-20factsheet-200922.pdf

3.6% discount.

Feel free to draw your own conclusion.

1 month ago

dumbMoney

@RealValueInvestor We call this selective memory and taken out of context, something we are very familiar with here. The so-called management's efforts to narrow the discount, to this day, they have not given a proper explanation on how the aborted multi-million dual listed fund effort was supposed to work, and why is it in the shreholders' best interest to take COL to court over their continued purchase of shares?

1 month ago

JohnD0ugh

The long-term investment success of Warren Buffett is world famous.

What is often neglected in the long-term success of Berkshire Hathaway is the role played by its shareholders or more specifically, by the type and quality of its shareholders.

Let me quote Warren Buffett on this fundamentally important factor in determining the success of a company’s share price performance.

“Over the long term, there has been a more consistent relationship between Berkshire’s market value and business value than has existed for any other publicly-traded equity with which I am familiar.

This is a tribute to you. Because you have been rational, interested, and investment-oriented, the market price for Berkshire stock has almost always been sensible.

This unusual result has been achieved by a shareholder group with unusual demographics: virtually all of our shareholders are individuals, not institutions. No other public company our size can claim the same.

You might think that institutions, with their large staffs of highly-paid and experienced investment professionals, would be a force for stability and reason in financial markets.

They are not: stocks heavily owned and constantly monitored by institutions have often been among the most inappropriately valued.”

The messages from Warren Buffett are very simple and very clear.

He is not keen at all to attract institutional investors for very good reasons and that he and Charlie Munger have a special kinship for the million-plus individual investors of Berkshire Hathaway.

As he explained in 1985 and many times after that, “stocks heavily owned and constantly monitored by institutions have often been among the most inappropriately valued.”

As a long-term value investor myself, I cannot agree with Buffett more.


i Capital.biz Berhad 2022 Annual Report

3 weeks ago

RealValueInvestor

JohnD0ugh's at it again! Claiming Buffet like status whilst COMPLETELY ignoring the FACT that Berkshire Hathaway DOES have a policy of buybacks which they ACT upon when they believe their stock to be cheap. This BTW is a lot more expensive than the SCANDALOUS 39% that ICAP was trading at at the close yesterday......

3 weeks ago

dumbMoney

@RealValueInvestor That's the difference between WB and the other WB Wannabes.

3 weeks ago

RealValueInvestor

Meanwhile, imagine the case of a closed end fund where the price is 2.00 and the NAV is 3.27. It is therefore trading at almost a 40% discount. It has 140,000,000 shares. Enlightened management, guided by proper corporate governance as they perceive it, therefore decides that the right thing to do is to carry out a buyback of 10% of outstanding shares, or 14,000,000.

Imagine this can be carried out at the prevailing price of 2.00, so it costs 28,000,000 to carry out the buyback.

After the buy-back there are now 126,000,000 shares left in issue (140,000,000-14,000,000).
Total net asset value has fallen from 457,800,000 to 429,800,000, a drop of just over 6%, but remember shares in issue has fallen by 10%.

Everything else remaining the same, what does this do to the NAV? Well, if we divide 429,800,000 by 126,000,000 we get a NAV per share of 3.41 or an increase of in NAV of 4.32%

To put it another way, imagine you’re a genius investor and you can’t find a better portfolio than the one you have already bought. Now imagine you could buy it at almost a 40% discount. Every part of your perfect portfolio but nearly 40% cheaper!

Wouldn’t that make A LOT OF SENSE?

3 weeks ago

dumbMoney

Yes, but the fund manager's AUM is reduced by 6%, and his fees by $420K. That's the problem! At say $50K a year for a junior analyst, that pays for 8 of them.

3 weeks ago

RealValueInvestor

dumbMoney - say it's not so! Who might be motivated by such a thing?

3 weeks ago

RealValueInvestor

https://www.cnbc.com/2022/11/05/berkshire-hathaway-q3-earnings-brk.html

Headline:
"The conglomerate spent $1.05 billion in share repurchases, bringing the nine-month total to $5.25 billion."

3 weeks ago

JohnD0ugh

That the type and quality of shareholders matter to the share price performance of Scottish Mortgage (SMT) or Pershing Square Holdings (PSH) or Berkshire Hathaway or icapital.biz Berhad frankly comes as no surprise to me.

icapital.biz Berhad’s own experience has the same message to deliver. I have been saying the same thing and doing the same thing ever since your Fund was promoted and listed in 2005.

During the 2005 initial public offering (IPO) of icapital.biz Berhad, Capital Dynamics intentionally took charge of its fund raising. This was done for two simple reasons.

First, Capital Dynamics did not charge icapital.biz Berhad any placement fees and related expenses of about RM2.000 million even though it was entitled to then in order to boost the NAV of your Fund even before it was listed.

Secondly, in conducting your Fund’s IPO roadshows, I intentionally targeted only individual investors and for the same reasons as Warren Buffett, I intentionally stayed away from promoting icapital.biz Berhad to institutional investors (events years later have proven my fears correct).

As Buffett said and as what I have been doing since your Fund’s IPO in 2005, “Our goal is to attract longterm owners who, at the time of purchase, have no timetable or price target for sale but plan instead to stay with us
indefinitely.”

The result of your Fund’s IPO was as I had expected – on its very first day of listing on 19th October 2005, the share price of icapital.biz Berhad closed at an outstanding 1% premium to its NAV.

The share price of icapital.biz Berhad then went on to trade at a persistent premium to its NAV until October 2008. Unfortunately, the ownership experience of icapital.biz Berhad has turned out to be different from that SMT.

While the latter saw a substantial decline in institutional ownership over the years and its discount disappearing, icapital.biz Berhad was cursed with a substantial increase in institutional ownership and a persistent discount problem.

In 2006 and 2007, only 3.000 million shares or 2.14% of your Fund’s shares were held by an institution, which sold all its shares in late 2008.

Regretably the institutional ownership of icapital.biz Berhad has now surged to 32.39 million shares or 23.13% and in the process, its NAV discount has widened and persisted.

Taking into account the experience of SMT, PSH and Berkshire Hathaway and the wisdom of Warren Buffett, it is obvious what the solution to your Fund’s nagging discount problem is – increase the ownership of individual investors.

How can this be done ?


i Capital.biz Berhad 2022 Annual Report

2 weeks ago

dumbMoney

So the price discount is attributed to the purchases by institutional investors. But who has been selling to them in the first place, other than individual investors? If the sellers are other institutional investors, there would have been no net change in their percentage share ownership. Better to blame the discount to disillusioned individual shareholders who sold out to the foreigners. If they didn't sell at a discount, the foreigners would have been forced to buy at higher prices. It is all supply and demand. There being more sellers than buyers. Also, COL has been owning the shares for more than 10 years now and still wants to buy, is that still considered short term?

2 weeks ago

RealValueInvestor

JohnD0ugh may I refer you to Jeremiah {5:21}? "Hear now this, O foolish people, and without understanding; which have eyes, and see not; which have ears, and hear not." It might help with your condition.....

2 weeks ago

dumbMoney

Since the company itself does not have any admin staff other than the investment manager, one can only then assume it is the latter that is now canvassing for proxies for the AGM. Is it in its job functions to influence the voting for directors? The latter are supposed to be looking after the interests of the shareholders and theoretically oversee the manager, if they are truly independent. But if their positions depend on support of the manager, how to effectively carry out the corporate governance functions?

2 weeks ago

dumbMoney

Minority Shareholders Watchdog Group should look into the position of directors elected on the basis of active canvassing by the fund manager whether they can still be considered as independent in terms of good corporate governance.

2 weeks ago

JohnD0ugh

This brings me to our Investor Day. Unlike the London or New York stock market, where closed-end funds or investment trusts are common, in Malaysia, we need to educate investors on the many benefits of investing in icapital.biz Berhad, the only listed closed-end fund in Malaysia.

The Board and Fund Manager have been considering implementing an effective, systematic and sustained investor relations strategy for your Fund with the eventual aim of increasing the ownership of individual investors or share owners as we prefer to call them in icapital.biz Berhad.

Conducting the highly popular Investor Day was one of the activities held to achieve this objective of increased individual ownership.

However, your Fund’s institutional investor in September 2015 rejected this solution outright, arrogantly saying that it is not a discount control mechanism.

The experiences of Scottish Mortgage (SMT), Pershing Square Holdings (PSH), Berkshire Hathaway and your Fund have proven this rejection very foolhardy or perhaps the institutional investor wanted fewer individual investors to compete with them in buying the shares of icapital.biz Berhad.

With hindsight, our recommended strategy is the right step to take in future. For a start, the Investor Day of icapital.biz Berhad will be back, starting with the 2022 event.

Buffett correctly counselled : We feel that high quality ownership can be attracted and maintained if we consistently communicate our business and ownership philosophy - along with no other conflicting messages.


i Capital.biz Berhad 2022 Annual Report

1 week ago

JohnD0ugh

As we were working hard to educate the existing and potential individual investors about the benefits of owning icapital.biz Berhad and its time-proven value investing philosophy, your Fund’s institutional investors were undermining our well-thought out efforts by sending out wrong or “conflicting messages” about your Fund.

An example was the 2012 messy AGM, which prevented us from conducting our Investor Day for that year. Another instance was the public posting in August 2015 of numerous false allegations about icapital.biz Berhad and its fund manager by your Fund’s institutional investor.

Coincidence or otherwise, this led to the publication of a defamatory article by a senior editor of a local financial publication just a few days before the 2015 AGM of icapital.biz Berhad.

The consequences of these conflicting messages were to seriously damage the reputation of your Fund and grievously undermined the tireless efforts of the Board and Fund Manager to increase the individual ownership and deal with the discount problem.

Let me quote Buffett again : “The market price for Berkshire stock has almost always been sensible. This unusual result has been achieved by a shareholder group with unusual demographics: virtually all of our shareholders are individuals, not institutions.”

The annual general meetings of icapital.biz Berhad used to be a very joyous and productive engagement for all. My hope is that the 2022 AGM and those after that will be like them again.

The journey to achieving fewer or even zero institutional investors for your Fund will not be easy. We have to also undo the damages inflicted on your Fund by the institutional investors.

To achieve this important objective and permit the share price of icapital.biz Berhad to trade at a rational level, I will need the support of like-minded individual share owners and here is my sincere appeal.

Whether it is to share with other individuals about the benefits of owning icapital.biz Berhad or speaking up in its AGM or participating in its Investor Day, I will need all your support.

Every step helps.


i Capital.biz Berhad 2022 Annual Report

1 week ago

dumbMoney

Read the shareholders structure of Berkshire Hathaway B shares, the more liquid and affordable version, here - https://money.cnn.com/quote/shareholders/shareholders.html?symb=BRKB&subView=institutional Look at the % of individual shareholders.

1 week ago

nhy6

In 2012, Evelyn Ho Lai Meng proposed the appointments of Andrew Pegge (Laxey Partners, a shareholder activist), Lo Kok Kee, and Low Nyap Heng to ICAP board.

This is how Evelyn Ho and Lo Lok Kee look like, check out their photos here :
https://mbsloop.wordpress.com/2007/12/08/1st-anniversary/

In 2011, Lo Kok Kee and Andrew Pegge of Laxey Partners tried to take down wee cho yaw’s United International Securities in Singapore. Laxey also nominated Lo Kok Kee as a director.

Lo Kok Kee and Laxey Partners were involved in the liquidation of Amanah Millenia Fund and Amanah Harta Tanah PNB 2, both listed on Bursa.

Lo Kok Kee published a book called “Dumb money investing”.

1 week ago

dumbMoney

@nhy6 https://www.thestar.com.my/business/business-news/2012/11/09/not-a-hostile-takeover/
For the record, United International Securities was the last of the Big 4 Singapore bank managed closed end funds to went for members liquidation because of the persistent price discount. So these are the results of shareholders activism where every one managed to exit their investments at fair market value and not at a discount.

1 week ago

dumberthandumb

Lo kok kee, long time kawan of city of london and andrew pegge/laxey, was sued by ogier, an international law firm for breach of contract in 2017. LKK failed to pay legal fees amounting to US$117,613.36. Lol. Dumb.

1 week ago

nhy6

In 2008, Laxey was fined by Swiss regulator for failing to disclose its 22.9% interest in a Swiss PLC. Swiss law requires any institution holding more than 3% of a PLC to disclose that within a certain time frame.

Lo kok kee sued by law firm. Haha, pattern sama je with laxey.

Is lo kok kee even a shareholder of icap? Why talk so much. Maybe buy together with his 2 london rakan kongsi?

1 week ago

dumbMoney

At end Nov 2012, almost 10 years ago, iCap share price closed at $2.33. Today, 10 years later, it is $2.00. Add back the 9 and 20 sen dividends, it is $2.29. So long term shareholders who held their shares had gone through a 'lost decade' with nothing to show for it. The coming AGM will be a good indication how solid this 'fixed deposit' base is? Did someone just pressed the panic button?

1 week ago

dumbMoney

During the last decade, the average month end NAV of iCap is $3.16, which at 1.5% p.a. management fee, would average 4.74 sen per year or 47.4 sen for the period. All this without owning a single share, whereas shareholders get zero. If shareholders have followed the real WB's advice and bought the dumb index fund instead, at least they would have receive an average annual dividend yield of 3%, or 30% over 10 years before compounding, disregarding price movements. So even if the index were to drop by 30% over this period, they would still end up about the same as holding the shares.

1 week ago

dumbMoney

In 2012, TTB told the press that he had been working on a world first dual listed fund, which had cost $1.5 million so far and not a single sen had been charged to the fund. Imagine the shareholders' surprise when in the 2020 accounts, a total of $6.7 million were charged as expenses to the fund, with just a footnote to explain that it was reimbursement of the dual listed fund expenses. What changed his mind to bill the fund instead, and what did the fund get out of this aborted exercise? Instead of supposedly narrowing the price discount, it got worse. Coincidently, the then chairman of the Board resigned before the AGM, citing differences in opinion. What differences? https://www.pressreader.com/malaysia/the-star-malaysia/20121107/282557310471653

1 week ago

JohnD0ugh

Scottish Mortgage (SMT) is more than 113 years old and still growing. Your Fund’s age is a spring chicken in comparison. Stan Truhlsen, an Omaha ophthalmologist turned 100 on 13 November 2020.

In 1959, Stan, along with 10 other young Omaha doctors, formed a partnership with Warren Buffett, called Emdee, Ltd. When this partnership distributed its Berkshire Hathaway shares in 1969, all of the doctors kept the stock they received.

Two of Stan’s comrades from Emdee are now in their high-90s and continue to hold their Berkshire shares. Value investing succeeds because it goes hand in hand with a focus on the long-term.

Value investing demands patience and the ability to be a long-term investor. Longterm is defined not just in terms of years but in decades.

Can icapital.biz Berhad enjoy an outcome similar to SMT or Berkshire Hathaway where its share price trades at a rational level ?

The case for this is strong indeed and it used to be like that when individual shareowners own nearly 98% of your Fund.

i Capital.biz Berhad 2022 Annual Report

6 days ago

observatory

ICAP has just completed its 2022 AGM. Below is the trend on the votes on director's reappointment:

Year For Against
2022 43,756,291 33,170,514
2021 43,623,877 31,099,317
2020 42,332,043 30,267,507
2019 43,829,446 27,963,500
2018 46,261,889 28,389,753
2017 44,554,250 24,832,500
2016 57,089,178 23,646,300
2015 60,198,263 20,281,250

The support for company directors’ reappointment has declined from about 60 million shares in 2015 but has since stabilized at about 44 million shares. The Against vote has increased to 33 million shares in 2022.

As CoL has stopped further share purchase pending ICAP's appeal against High Court's ruling, the Against votes is unlikely climb much further, not until CoL resumes purchase assuming a favorable court outcome.

4 days ago

observatory

As CoL has stopped buying, the NAV discount has widened. This is contrary to TTB’s prediction and is common sense.

The evidence can be seen from the Bursa announcements. The last purchase by CoL was on 7 Apr 2022. The NAV on 6 Apr was RM3.36, share closing price RM2.15, implying a 36% discount.
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3249780
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3249196

The latest NAV on 23 Nov 2022 was lower at RM3.28. The closing share price was even lower at RM2.00. The NAV discount has widened to 39%.
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3309148

The small-scale purchase by TTB is rather useless in stopping the discount from further widening.

With no other investors pressing for change, there will be lack of pressure for management to change for the benefit of unit holders. ICAP remains a value trap.

4 days ago

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