Hmmmmmm..........the newbie may be wiser than us blinkered oldies......

Manager of ABC: The managers of the closed ended funds always have an option to purchase of its own shares or to invest in other counters. However, the managers can option not to purchase own shares:-

a). To invest in other counters during downturn periods. In doing so, the co needs substantial amount  of reserve/cash to standby. If an rich cow close ended fund buys in own shares, it will limit its capability during the downturn periods. In doing so, the prediction/view of the future is very importance. Obviously, in this case, the manager of ABC feels that the market is going to do correction very soon.

b). If  ABC close end fund buys in own shares and it happens that the gap between its share price and NTA cannot be closed, then no only ABC cannot have substantial amout of fund to invest in other counters during downturn periods and its cash level will also be exhausted. Noted that the CI index is at the peak in Malaysian history. So, if the market is collapsing now (including ABC share price), then it cannot do anymore investment. The manager of the ABC fund cannot control the market sentiment including the ABC share price, so the best way is to wait for the better timing. REMEMBER to remain patient at the moment especially during this uncertain period. The TIMING and PATIENT are the most important criteria  in any share investment.

At the moment, they may have some laughing stocks to comment/rookie/mock on the ABC share price. Just remain patient and stay calm. We aim for long-term investment and this is our objective.
BTW, ABC close fund is not suitable for any short-term investors.



This post has been edited by firee818: Nov 19 2012, 09:04 AM

What A had asked is not about buying back to close the gap between NAV and share price.
What A had asked is investing in ABC fund itself.
Since ABC fund is a good long term investment, isn't it a good investment target by ABC fund itself, since it has a big discount of 20-30%. <--- this is the issue A had asked.
I cannot answer this, because as a fund, you look for good stock to invest, right? So why excluded ABC stock then?
Also it is merely another investment target, A had not asked to dump all the cash into it, just a portion like ordinary investment target.

So as mentioned above, if CI is peak now, and may collapse based on the above posted opinion or,
isn't it ordinary investor should avoid ABC share now as well?

As last part, the statement is viewing ABC fund is a long term investment and a good long term investment, and not suit for short term investors, isn't it suit to the ABC fund to invest in ABC share price? <----- this is key question asked by A, that I am speechless to answer to him as a experienced investors.

Indeed, the manager of ABC has considered to purchase its own shares if the difference between its market price and NTA by 40% of its NTA. i.e. if NTA=RM 3.00, then the target price is about RM 1.80.

Don't ask me to prove where the source from, I just noticed somewhere in an article.



No one can predict the future including the manager of ABC.
While it is worth to invest some counters which is below its NTA, the potential investors themselves should also consider their surrounding enviroment.
There is no guarantee profit for any investment.
The manager of ABC also can't guarantee the future performance of ABC.
For investment, you need to judge yourself, you need to take the risk yourself, no one is forcing u to buy.

A simple methodlogy for invest ABC.
If u trust ABC manager, then go and buy.
If u don't trust ABC manger, then leave this counter, avoid this counter.

For investment in ABC, the manager of ABC urged u to look for long-term.
If u trust ABC manager and u buy in this counter. If later on its price collapse, u need not to worry because u trust ABC manager. Maybe one day the price may recover and even over the price u had bought in. So, why u worried so much if u are looking for long-term?

It is so funny and not logic if u invest(mean long-term) in ABC and yet u don't trust ABC manager. Come on, you always have a choice!

Again, I would like to emphasize, if u are so worry about short-term ABC share price performance (e.g. share price collapse), then just leave this counter.

This post has been edited by firee818: Nov 19 2012, 02:39 PM

Indeed?

Yes, A trust ABC manager, but ABC manager may quit, then A cannot do anything. This is major fear for A.
as ABC manager is not the major shareholder, unlike ordinary UT, fund manager cannot be sacked by unit holder, but in closed ended fund, fund manager position is determined by board of director and board of director is determined by majority of shareholders, right?
Anyway, this should be not a major issue for A for now.

Also, there is no issue about short term or long term or guarantee profit or whatever, A fully aware of it.

Just A asked some common question, it is not nice for me to tell A, hey if you do not trust ABC manager, then leave it. Not doing good for me that already involved in stock market for decades to say like that.(may make me sound arrogant, as I am not WB or pronounced as brilliant investors as well, so make me look silly if I say like that).
A just asking nicely, not nice for me to answer back to him like that.

A just needs asking some question that only make clear of his mind only.

Just like A had asked if confidence about the ABC stock, and the stock NAV may achieve double or triple from now, isn't it a good and bargain investment target? including, ABC fund itself.

If ABC fund may achieve and become NAV RM10.00 in 8 years or 10 years from RM3.00, so isn't it investing in ABC stock is indeed a good target to have?
So ABC fund itself should consider it, right? Why ABC fund not considered it?
Why need to wait 40% discount to the NAV?
A discount of 20% + potential (may) future good appreciation/performance from Rm3.00 to Rm10.00, is not good enough for ABC fund consideration? Not many stocks out there may have such a good performance.

The above some simple summarised questions are those I still scratching my head to answer to A.

As I already mentioned, the timing to buy/sell any shares is very impt. The manager of ABC feels that the market is going to do correction (don't ask me to prove this) very soon. Indeed, the ABC has stopped purchase shares for a year already.
It is wiser to buy at the lower price during market correction.

Today 19/11/2012, price at RM 2.40
The manager think that the market is going to do correction, so let say 3 months later, the price
goes down to RM 1.50(assume below NTA 40%) , is it wiser to buy at that price???????

Whatever it is, if u buy ABC, u need to trust its management.
If u not satisfy with its performance, u can always doing investment at your own. No one can stop you and you performance may even exceed the ABC performance.

This post has been edited by firee818: Nov 19 2012, 04:23 PM

If 40% discount to NAV, I'll buy, no question ask.

NO GUARANTEES...... yet Mr. TTB said that as IF............

“My 18% growth which I have built up may be gone. Our NAV has gained 189% since listing or 18% per annum. At such a rate, in seven years time, it would be RM8.78. We give consistent long-term returns,”

Yes, I understand, it is not about trust or not trust, surely investing in stock market, you trust the company management already, same with UT or closed ended fund.

But I taught previously there is discussion on NAV vs share price issue, aka investors shouldn't care about share price is Rm1.50, or RM2.40, but purely look at NAV when investing... or no?

A threw some question to me, so cannot be I just answer to him, don't ask too many question, if don't trust, leave it, or vice versa, trust, just invest.

This post has been edited by cherroy: Nov 19 2012, 04:40 PM

China companies listed in Bursa all kena whacked. From PE 6-8x all the way to PE 1-2x. Some even trading at below its net cash.
I found some similarity on icap with these China companies.
Growing NAV with little or no dividend, and little or no care for shareholders.

The following was written by CIMB regarding Xinquan after many quarters waiting for generous dividend or some kind of "action" taken.

"We are frustrated that Xingquan has taken no steps to enhance shareholder value. Management says that it needs its cash pile for future capex and working capital. We argue that it is not doing enough for
shareholders. "



This post has been edited by yok70: Nov 19 2012, 09:33 PM


Attached File(s)
 Xinquan_cimb_161112.pdf ( 594.95k ) Number of downloads: 19

Ummm..........today ICAP is RM2.28........how ar?

For it to get to Rm8.78 in 6 years , it needs to achieve 25.2% compounded growth for the next 6 years!

To me price does not matter. I look forward on the NAV to hit RM8.78 instead of share price .

KEEP Looking!
YOU may find it in yer DREAMS tonite!


BUt not at Tan teng BOO! 's ICAP........

LOL, that's your view and I have my own dream .

For it to get to Rm8.78 in 6 years , it needs to achieve 25.2% compounded growth for the next 6 years!

That is price of what I am paying, indeed I hope it dropped more to RM1, so it needs to achieve to 44% for the next 6 years . Wow, I have a potential upside of CAGR of 44% for the next 6 years !

Brilliant!

The NAV of the fund depends on the stocks the fund holds and I find it so amusing that there is not much talk focused on the stocks iCap hold.
One could look at the EPS of the stocks iCap is holding.
Is the EPS generally increasing, decreasing or lackluster?

What is iCap's 5 biggest stock holdings as per last annual report?
PetDag, Parkson, Padini, F&N and Boustead.
Are these companies earnings increasing or decreasing?

If the earnings are generally decreasing, how will their stock price rise?
If these stock price don't rise, how will iCap's NAV increase at such a huge compounding rate?

TBH, if I buy iCap now, I would be over the moon if the NAV touches 3.50 lah.

OK, I am waiting you to fly kite when ICAP's NAV reach 3.50, do not need you to fly moon loh .

Makes a lot of sense there! And if one would like to not feel the pain of "discounting" of NAV to stock price of the CEF, then, one can also mirror TTB's holdings on these!

IMO, NAV means nothing if there's nobody buying the stock to push the stock price up...
At the end of the day, stock price (capital gain) and dividend yield are what really counts!
Becoz these are the things that goes into our pocket, not NAV...
Just my opinion