Saturday, April 14, 2012

Deciphering what ICapital did on ICAP

As in my previous article, I highlighted that ICAP is a closed end stock which is undeservingly trading at much below its NTA. Latest as at 12 April 2012, it is trading at RM2.22 while its NTA was RM2.87, a  22.6% discount to its NTA. Perhaps what some investors do not like is that this stock does not pay dividend. Hence it is not part of a dividend stock portfolio which is now becoming an important thing for longer term investors in Malaysia especially.

Another thing about ICAP is that not much is known about the actions that the closed end stock does except until its Annual Report is out. We do not know the position they probably would have taken on especially when it comes to purchasing new stocks or whether they have sold some of the investments over the 1 year period. Some of their actions can however be deciphered if we do a little bit of work by checking out the companies that they invested in. As at 22 June 2011, ICAP has a portfolio of 10 stocks as below:

With Updates on Suria Group as at 16 Apr 2012

If we check out the companies that they invested in and look at the Top 30 shareholders, we can get some information. From above, we know that as at some of the dates that are presented they have increased their stake in Boustead while selling some of F&N's shares. I think they probably have same opinion on findings with regards to F&N. No change as at those dates mentioned were made for ICapital's favorite Parkson and Padini. So was MSC and Suria Group.

I am not able to find out what ICapital did for 4 others if its investments. Unless I look through all the Annual Reports, I am also not able to find out whether they have added on to their portfolio.

On how they perform since 31 May 2011, well the NAV of the company improved from RM2.77 to RM2.87 in 12 April 2012. Well, this is not going to be a good year for ICAP, probably (as they have about 50 more days to go).

As for cash holding, they have increased the cash holding as at 30 Nov 2011. This is probably due to they could not find anything exciting to put their money in or it could also be that the market is on the expensive side. They are not wrong.

In any case, due to the discount and looking at the portfolio they are holding, ICAP is not a bad closed end fund to hold, I should say. I would love it better if they pay dividend however.

Note: Updated on 16 Apr 2012.

Serious Investing!

No comments: