Are these still valid?
as of 13 nov 2014, its NAV is RM3.03 while its Market price as of 19/11/2014 was RM 2.4. A 20.7% discount still exists.
Secondly, is the Dual listing still on?
The Fund Manager has been running all over Malaysia, updating the status of the dual listing. (Well actually, it was also a roadshow to encourage share owners to attend the upcoming EGM to re-elect a particular director..that is story for another article.) below are new information provided:
What new information do we have?
1. The Dual listed fund is actually a separate fund from Icapital.Biz
2. It will be quoted in USD
3. The 2nd listed country (beside Bursa) is a country without capital gains tax. The fund manager (Capital Dynamics Asset Management SB) has offices in KL, Singapore, Hong Kong, Australia and Shanghai. This rules out Australia as country of listing as it has capital gains tax in placed.
4. The IPO will try to raise USD100 million as fund size.
5. It is in the Due diligence stage and should be ready by 1H 2015.
6. It comes with a free warrant with every 5 shares subscribed and the strike price is tied to its NAV.
7. Any shares bought or subscribed in Malaysia (which will be in USD) can be transferred to the 2nd listing country. (the fund manager claims this makes it a legal avenue for one to send ones fund oversea)
8. It will be a global fund with a mandate to invest in 42 countries.
The Fund manager, stresses that the fundamental reason for this is to benefit the share owners, presumably to handle the NAV gap in Icapital.Biz. however he is tight lip on how does a 2nd fund solves the issue. He claim any information of this sort might seen as market manipulation with insider information.
If this is the case, then it is more important for us to study how it might benefit Icapital.Biz share owners. If the NAV to price gap is closed or narrowed we are sitting on a possible of 26% gain (Assuming we buy at RM2.4 and it rises to its NAV at RM3.03)
We speculate, Icapital.Biz with its cash of about RM250 million or USD74.5 million will subscribed to the new fund and will distribute all the shares it subscribed together with its new warrants to Icapital.Biz share owners as dividend in specie.
Is this what is planned? Only time will tell. We will wait and see.
Note: I am a share Owner of Icapital.Biz
Happy Investing !
(For more company articles please click: Company Analysis)
You cited dual-listing plan to narrow the NAV discount. How does the dual listing narrow the NAV discount? What is the likelihood that the new fund will not be trading at a discount to NAV?
ReplyDeleteHi, TTB in last year's AGM claimed that he is working on the NAV discount issue and he thinks a dual listing can handle it. During the road show, people asked him the same question since it is a separate listed fund, he is tight lip about it.
DeleteSo at the moment, I am also asking the same question. Perhaps, the share owners of Icapital.Biz should be aware the majotity of CEF listed in the US trades at a discount.
I also think any counters that trades below its NAV (There are plenty of them on Bursa), is due to lack of exposure or foreseeable boom in earnings. At least the investing community thinks so.
The only way for the price to trade at premium, is when the fund performs like Berkshire Hathaway, If there is a Coca cola or Alibaba in its portfolio where it bought way back..then, I am pretty sure a premium occurs.
I believe, the premium and discount occurs not only in this fund but also in any counter and it is due to the herd mentality of Mr.Market.
So what is on TTB's sleeve? I don't know... But it is a good learning experience for me none the less.
Cheers!
Thank you for your comments and information. Appreciate your effort. Please keep it up and write more. :)
ReplyDeleteThanks Bro! Will surely write more, stay tuned!
DeleteStumbled upon this, thanks for the post. It will be interesting to see the development of iCap, definitely a good learning experience.
ReplyDeleteHi Jbase， glad you find the post useful. Please share with us if you have additional info too ya.
ReplyDeleteMind to share why you think the management is good, as stated in the first paragraph? Any facts to support this?
ReplyDeleteMalaysia Stock Talk,
ReplyDeleteGood point. I must admit, I don't have documentation facts for referring the management as good. As "good" is a subjective matter. I can only offer signs of it. This itself certainly is some what biased as I am judging from my own experience.
Further more the management i am referring to is the fund manager. I do like his direct and no playing around sense. You could also find that he is some what working hard to improve the fund. (But whether that is translating to results is another matter, yet to be final). From the news letter you can also see his ability. I also think the fee structure is fairer compare to the other funds (he could made it easy for himself but he didn't).
Now that does not mean he does not make mistakes. He does. on the other side, To be fair, he makes good judgments as well.
One thing tough, we must take a pinch of salt in judging any management as we do not know them personally and people do change in time.
Direct and no playing around sense? If you follow his facebook page and newsletter, don't you sense someone tooting his own horn? Why not let the results (fund performance) speak for themselves? In latest AGM on the reappointment of Tunku Aziz, why fired at major shareholders instead of focusing on the agenda itself which is the suitability of Tunku Aziz to be reappointed as director?
ReplyDeleteWorking hard as in the proposed dual-listing? How could the dual-listing narrow the NAV discount? If it doesn't work, isn't it better to be practical to focus on discovering hidden gem and putting in so much efforts in the dual-listing? Anyway, benefit of doubt should be given to the fund manager. The chance of reintroduction of capital control in Malaysia is unlikely but not possible. How the fund manages the situation if this happens?
The fee structure is fairer compared to other funds? Mind to give examples?
Like I say in the earlier article on Icapital.biz, You either love the fund manager or hate him. He is blunt, blows his own horns, arrogant. No doubt about it. The way he lambasted the major shareholder could have been done better. He should have explained the suitability of Tunku Aziz. But then again, the major Shareholder should have responded as well. Voting out a director is a major issue, casting a no vote in a AGM shows a tussle.
ReplyDeleteInterestingly, as for his performance, at one point people had so much trust in it, it traded in a premium for few years.
Now it is in a discount. Perhaps he was bearish too early ( a comment highlighted by Mr.冷眼 as well）. It shows in the fund performance. Only time will tell.
As for the fee structure, he mind as well go and set up normal fund, and charge transaction fees (public mutual charges 5.5%) on top of his admin and advise fees. He would have made more. (There are tonnes of mutual funds but only 1 CEF, it seems to shows it is not lucrative enough for the bankers)
Look, I am not defending the guy. I am not investing in it because of some guru. I am just interested to know if there is opportunity for me to take advantage off on the discount situation.
a fund selling on discount with 50% cash + run by a fund manager which has fairly good records (ok at least 'had' some kind of tract record before) + a promise to close the gap.. this sounds to be a opportunity worth exploring.
A discount of 20 odd % worth a look. The fund is holding cash. When the money is deployed, it will be reflected in the fund. On top of that, the fund did grow at a CAGR of 3.4% vs KLCI 3.7% 2011-2014. A horrible result but it grew non the less.
Will the dual listing work? Who knows! There is very little info to judge now. But my bet is, it will. The guy's face is at stake.
So, the lousy personality of the manager aside, is there value to be exploited? That is what i am exploring...
Your providing all information about the listing capital and financial detail are really very good and useful keep it up.
ReplyDeletecrossboarder exchange