Designing ICAP’s dividend policy proved a complex undertaking as it has to meet the differing needs of shareowners without abandoning the raison d’être of ICAP. After careful research and conducting numerous simulations, the most innovative dividend policy was designed to meet three objectives:

(i) For ICAP to trade at a rational price;
(ii) To cater to shareowners who desire long-term capital appreciation; and
(iii) shareowners, young or old, single or with households, who need regular income.

Consequently, the innovative dividend policy of ICAP became an aggregate of 2 components:

(i) Base Rate: 1% of NAV per share.
(ii) Top-up Rate: 8% of the difference between the share price and NAV per share.
a. The NAV per share is an average of 4 weekly NAVs before the dividend payout date.
b. The share price is the volume-weighted average price over 4 weeks before the dividend payout date.

The first ICAP dividend to be declared under its innovative dividend policy went ex on 5/11/2024.

At the same time, ICAP introduced a Dividend Reinvestment Plan (DRP) so that shareowners can receive their dividend either as cash or a reinvestment in ICAP. This plan has also been completed.


i Capital Newsletter Volume 36 Issue 18

ICAP was listed on the KLSE on 19 Oct 2005. From then until Sep 2023, ICAP served as a pure long-term capital appreciation fund.

It paid out dividends only on two special occasions – in FY2013, when a special 9.5 sen dividend was paid out to utilise tax credits which were expiring then, and in Dec 2022, when a Special 20 sen Covid-19 dividend (totalling RM28 mln) was paid out to help shareowners whose finances may have been affected by the pandemic.

ICAP is the only listed company in the entire world to have paid out such a dividend. In response to long-held requests from a diverse array of shareowners and the tireless hard work of the Fund’s Designated Person, ICAP launched the most innovative dividend policy in the world in 2023.

Unlike conventional listed companies, where dividends are paid as a percentage of net earnings, net earnings are irrelevant to a closed-end fund like ICAP. Its dividend must be based on its Net Asset Value (NAV), and not merely calculated as a simple percentage of its NAV.


i Capital Newsletter Volume 36 Issue 18

The investments of icapital.biz Berhad are selected based on the eclectic value investing style of Capital Dynamics. As such, the Fund Manager and Investment Adviser of your Fund are continuously seeking stocks that are attractively priced.

i Capital.biz Berhad 3Q2010 Report

Warren Buffett shared with us the virtues of patience, “We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.”

i Capital.biz Berhad 1Q2014 Report

As a long-term value investor, icapital.biz Berhad does not engage in market-timing. Its fund manager continues to hunt for attractively valued stocks, irrespective of the prospects of the stock market and the Malaysian economy.


i Capital.biz Berhad 2Q2014 Report

The concept of value investing is really simple. However, understanding and applying this time-proven investing style consistently is another story altogether.

Value investing is about finding the intrinsic value or sustainable earning power of a stock, a business or an asset and then buying it at an attractive price, which is always below the intrinsic value of the stock, business or asset.

Doing so provides the buyer a margin of safety, one of the central concepts in value investing.

i Capital.biz Berhad 4Q2015 Report

Whatever the outlook may be, I would like to reiterate to share owners that the portfolio of icapital.biz Berhad is managed based on the eclectic value investing philosophy of Capital Dynamics.

The margin of safety principle underlines it all and it takes on greater importance in an environment that is best summed up as “It was the best of times, it was the worst of times.”


i Capital.biz Berhad 4Q2016 Report

Most of the ASEAN economies are performing well (with Thailand being the exception). Besides, Vietnam, Thailand, Indonesia, Cambodia and Singapore have all recently seen stable political changes.

Given such positive trends and responsible societies, should the ASEAN stock markets, including that of Malaysia, not be trading at a premium to those found in conflict-torn areas like Europe and Britain ?

The same principle applies to the share price of icapital.biz Berhad. It should be trading at a premium or at least without discount.

Should the present large foreign investors allow the stock price of icapital.biz Bhd to trade without any interference, the discount of your Fund will disappear at a faster pace and its stock price will then be able to trade at a rational level earlier than otherwise. Your Fund, like Malaysia or ASEAN, has yet to be understood and appreciated.

I would like to share two useful quotes from Charlie Munger with our shareowners:

“People calculate too much and think too little.”

“The big money is not in the buying and the selling, but in the waiting.”


i Capital.biz Berhad 1Q2025 Report

In my commentary in last year’s annual report, I gave my positive outlook on Malaysia. Briefly, I wrote that from a macro viewpoint, “Malaysia’s domestic political development has entered a new stage, one which I think heralds better political governance, promises a better and stable government and hence a better Malaysia.

With Malaysia blessed as a country with great and plentiful human talents, the anticipated new era will give birth to a country which will once again be on the right path of fulfilling her potential. I expect the Malaysian stock market to be a beneficiary.”

Then, in my talk on 5th November at the 2023 Investor Day, I forecasted that the KLCI would reach 2,500 to 3,000 points in the next three to five years. Nearly one year later, my longer-term bullish views of Malaysia and her stock market have remained the same.

With this, it is very timely for me to remind share owners about a very important principle on compound return. Investors are told it is never wrong to take a profit. Charlie Munger has a simple answer for this question.

“The first rule of compounding: Never interrupt it unnecessarily” - Charlie Munger

His advice is one of the most important principles on successful investing. Investors should not interrupt that compounding lightly. The combination of Malaysia entering a better era, icapital.biz Berhad invested in more stocks and a high quality share ownership structure can produce a very exciting future for your Fund’s NAV and share price.

Do not interrupt the compounding of your investment in icapital.biz Berhad.

Finally, let us remember what Lee Kuan Yew warned about Slater Walker. Let us all ensure that another British investor now does not destroy icapital.biz Berhad, a budding role model for Malaysian individual investors, and other companies listed on Bursa to emulate.


i Capital.biz Berhad 2024 Annual Report

As I have shown above, what is even worse than the harassment is that this large activist foreign voter and its collaborators have bashed the shares of your Fund, just like Slater Walker did with Haw Par.

This bashing has huge detrimental impact on your Fund and more importantly on the development of a closed-end fund industry in Malaysia. The same group of activists has previously wound up another listed closed-end fund, Amanah Millenia Fund in 2007.

Unlike other listed Funds or listed companies, icapital.biz Berhad was intentionally set up and promoted by myself with a unique objective on top of a social mission.

The objective was not just narrowly financial but it also was broader and to demonstrate that sound long-term investing by individuals can work in Malaysia.

Achieving such a long-term social economic objective is an important part of nation building and can bring about many positive contributions to the development of this young country and its capital market.

It can also help bring about a better society. While Lee Kuan Yew wanted to make sure that Slater Walker did not destroy Singapore’s reputation as a global financial centre, successfully building icapital.biz Berhad is to me very similar to building a better Malaysia.

We have worked very hard and with our heart to attract and maintain high quality share owners in icapital.biz Berhad. We still have a very long way to go in this daunting journey. As your Fund’s Designated Person, I truly envy the highly favourable and positively constructive situation Warren Buffett is in with his Berkshire Hathaway.


i Capital.biz Berhad 2024 Annual Report

I have been a “student” of the stock market for more than 50 years. Over the decades there are a few lessons from investing that I have learned which are very precious and timeless in importance.

The more experience I gained, the more I analyse the situation, the more convinced I am that the quality of investors matters a great deal as to how a company performs and develops. In fact, the quality of investors matters even to the quality of a country’s capital market and economy.

Berkshire Hathaway, a huge US conglomerate, is owned by a large group of very committed long term value investors. Warren Buffett likes to hold large amounts of cash in his Berkshire Hathaway.

The already large pile of cash at Berkshire Hathaway then jumped from the previous record of US$189 bln, set in the first quarter of 2024 to a huge US$276.9 bln in the last quarter.

Warren Buffett’s Berkshire Hathaway has so much cash that it presently holds more short-term US Treasury Bills than the US Federal Reserve does and he is no hurry at all to invest the cash holdings and his fellow shareholders are not harassing him.

The reason why I am sharing the massive cash hoard of Berkshire Hathaway in this annual report is that Warren Buffett has been doing this cash hoarding for a long time now. It is nothing new. The amazing thing is not the huge amount of cash held by him, a well-known fact, but that his shareholders do not harass him about this.

In the case of icapital.biz Berhad, it has not been as fortunate as Berkshire Hathaway. Ever since a large activist foreign voter and its collaborators came in, your Fund and its Designated Person have been incessantly harassed by this bunch, even though the reason why Warren Buffett has so much cash and why your Fund had a large amount of cash was for the same exact reason – stock over valuation and the lack of margin of safety.


i Capital.biz Berhad 2024 Annual Report

Since its listing on 19 October 2005, the NAV per share of your Fund has risen from RM0.99 to RM4.31 by 31 May 2024. This represents a gain of 371.94%, assuming the Special Dividends paid in September 2013 and December 2021 were reinvested.

Since its listing on 19 October 2005, based on the Artificial measurement, the share price of your Fund has risen from RM1.01 to RM3.16 by 31 May 2024. This represents a gain of 256.14%.

Based on the Trending measurement, the share price of your Fund has risen from RM1.01 to RM3.43 by 31 May 2024. This represents a gain of 286.57%. During the same period, the MSCI Malaysia index rose only 49.03%.

Since its listing on 19 October 2005, the NAV of your Fund has increased 8.69% per annum. Since its listing on 19 October 2005, based on the Artificial measurement, the share price of your Fund has gained 7.06% per annum.

Based on the Trending measurement, the share price of your Fund has appreciated 7.53% per annum. Both cases assumed the Special Dividends paid in September 2013 and December 2021 were reinvested. During the same period, the MSCI Malaysia index rose only 2.17% per annum.

The cash level of your Fund has in the past fluctuated substantially from a low of 10.51% to a high of 68.59%. For the financial year ended 31 May 2024, the cash held in absolute terms was about RM88 million (or RM0.63 cash per share), indicating a drop of about RM58 million from the RM146 million held for the year ended 31 May 2023.

The reduction in your Fund’s cash level is due to the additional investments made during the said financial year.


i Capital.biz Berhad 2024 Annual Report

Each year, the financial year of icapital.biz Berhad ends on 31 May. 2024 is no different. Except that this time round, about two weeks before the 2024 financial year drew to a close, its share price started to plunge in an artificial manner, due to concentrated selling by a large London-based activist investor and its collaborators (London).

In our commentary below, in order to see the impact of this contrived concentrated selling, we distinguish between two performance measurements for icapital.biz Berhad for this year’s Annual Report.

[1]. An “Artificial” performance that is based on the artificially depressed share price of your Fund on 31 May 2024.
[2]. A “Trending” performance that is based on rising price trend of your Fund before the said selling started and assumes it closes at RM3.43, the closing price of your Fund on 13 May 2024.

During a period of 13 market days, London sold 878,100 shares, which accounted for a substantial 52.85% of your Fund’s total trading volume. On critical dates, such as 16 May 2024 and 17 May 2024, these disposals represented a huge 68.04% and 70.61% of daily volume, respectively, leading to a steep 5.81% drop in your Fund’s share price from RM3.44 to RM3.24 and a substantial jump in the NAV discount from 17.51% to 23.94%.

The volume and timing of these disposals are critical. The concentrated nature of the sales imparted significant downward pressure on the share price. There are a number of adverse consequences for your Fund and its shareowners from this concentrated selling by London.

First, from 14 May 2024 to 31 May 2024, your Fund experienced a hefty drop of 8.14% in its share price from RM3.44 to RM3.16 even though the NAV of your Fund went up by 3.36% from RM4.17 to RM4.31.

Secondly, in that short period of the concentrated selling, your Fund’s NAV discount skyrocketed from 17.51% to 27.36%, a sharp deterioration of 9.85 percentage points.

Thirdly, the cumulative return of your Fund from its inception in October 2005 to 31 May 2024, based on its share price, plunged over 30 percentage points from 286.57% to 256.14%.

Fourthly, the annualised compound return of your Fund from inception in October 2005 to 31 May 2024, based on its share price, plunged from 7.53% per annum to only 7.06% per annum. An annual compound return of 7.06% will result in RM10,000 growing to RM39,133 after 20 years while an annual compound return of 7.53% will result in RM10,000 growing to RM42,716 after the same 20 years, a substantial difference.

Fifth, the 1-year return for icapital.biz Bhd in Ringgit terms plunged from 66.50% to 53.40% and in US$ terms from 63.41% to 50.54%.

Sixth, the 3-year return for icapital.biz Bhd in Ringgit terms plunged from 97.40% to 81.86% and in US$ terms from 73.65% to 59.98%.


i Capital.biz Berhad 2024 Annual Report

In i Capital dated 25 Jul 2024, we shared the experience of one discretionary account managed by Capital Dynamics Asset Management Sdn Bhd (CDAM). This client started with RM250,000 in 1998 and from 2004 to 2006, added another RM430,000. CDAM made so much money for this discretionary client that from 2009 to 2015, the client withdrew RM3.600 mln and this client still has over RM1.000 mln in her account.

In this issue of i Capital, we share the experience of another discretionary client of CDAM. The client started with CDAM in end 1998 with RM400,000. Then, from 2010 to 2022, the client withdrew a total of nearly RM3.000 mln and now, his discretionary account still has over RM3.400 mln. Our performance speaks for itself.

In Feb 1999, another client opened a discretionary account with CDAM with about RM500,000. From 2004 to 2008, the client made additional investments and withdrew some, resulting in a net investment sum of only RM159,000. When the client closed the account in 2012 to migrate to Australia, CDAM had grown this discretionary account to RM5.129 mln.

All the above performance figures are real. No scams. Yet, how many will go for doubling your money in a month as opposed to doubling within 5 to 8 years ?

Investing successfully is actually pretty straightforward. Besides having the appropriate investment philosophy and time horizon, patience and discipline are needed.

All discretionary accounts managed by CDAM are for the long term; no such nonsense as doubling your money within a month. If it is so easy, Tan Teng Boo would have retired a long time ago and just managed his own money.


i Capital Newsletter Volume 36 Issue 7

This impersonation free-for-all has already been going on for a few years now and many Malaysians remain easily tempted by quick money scams and the authorities appearing unable or unwilling to tackle this illegal activity. In the meantime, the real Tan Teng Boo keeps being victimised. He lodged his first police report in 2021.

One of the two Malaysians conned in the latest scam is a wealthy 70-year old Malay businessman who apparently lost millions in the said scam. The impersonator promised this unbelievably greedy old man to double his millions in a month based on some false initial public offerings (IPO). Apparently, the said greedy victim was asked to transfer his wealth to a bank account with a name containing “XXXX Cleaning Services Sdn Bhd”. Transferring one’s money to “Cleaning Services” ? No wonder the 70-year old man kena cuci.

What is most demoralising and disappointing to Tan Teng Boo is that Capital Dynamics has purposely been offering all kinds of investment products and services to individual investors at very cheap prices with the aim of educating them about sound investing. The world class www.icapital.biz is offered to investors at only RM49 per year with the full colour printed version at RM99 per year, and with each weekly issue delivered to your house or office.

The annual Investor Day of icapital.biz Bhd costs only RM80 for a whole day top-class investment event on 26th and 27th Oct at the KLCC.

Then, Teng Boo intentionally launched icapital.biz Berhad in 2005 and manages it so that individual investors can have the opportunity to invest in a high-quality investment at very low transaction costs.

It can be so maddening when it can be so difficult to get someone to pay a mere RM49 or RM99 to subscribe to www.icapital.biz or to “take the trouble” to attend the Investor Day. Yet it can be so easy for people to transfer large sums of their own money to a bank account with a name of “Cleaning Services”.

What is wrong with this world ? Does it have to be so paradoxical ? Why are people so short-term focused and yet want to live a long life ?


i Capital Newsletter Volume 36 Issue 7

Successful long-term value investing requires a few factors.

Be Patient. Wait for the right stock at the right price to buy. Top-down/market timers would wait for the right time instead. When opportunities emerge, patient investors are the best prepared, as they always have cash on hand.

Keep Compounding. Long term value investing works because of the power of exponential growth or compounding and this requires patience and discipline.

Go Against Conventional Wisdom. Be fearful when others are greedy. As Sun Tzu said, prepare for war in times of peace.

Think and Act Independently. Be confident enough to be able to think and act without needing affirmation from others or the market on one's investment decisions.

Require a Margin of Safety. Having a sufficient margin of safety is vital as it means that mistakes, which are inevitable, will not be permanently damaging.

For long-term value investors, remember what Mark Twain famously wrote : "October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February."


i Capital.biz Berhad 2Q2017 Report

Value investing is not about timing the stock market, a fundamental point that many, many subscribers and investors are still confused with. Value investing is about valuing businesses and stocks appropriately and then patiently waiting to buy or sell. For many years in the past, Tan Teng Boo held plenty of cash for icapital.biz Berhad. As Charlie Munger counselled : “The big money is not in the buying and the selling, but in the waiting.”

For those who want to learn more or to be reminded about value investing and at the same time discover solid investing opportunities, the 2024 Investor Day of icapital.biz Bhd to be held on 26th and 27th Oct 2024 is the perfect occasion to do so. Conducted in a highly efficient manner at the KLCC and at a super cheap price, attending the Investor Day is an excellent way for investors to remind themselves that they have to be highly disciplined in order to succeed. No short cut.

This annual event, created by Tan Teng Boo in 2010, is aimed solely at educating individual investors about sound investing. Register now and start or continue your journey of being educated on sound investing. Register so that you, your family, your friends and colleagues are among those who will benefit from this truly unique investment event.

i Capital Newsletter Volume 36 Issue 6

The Investor Day of icapital.biz Bhd is an annual event, created by Tan Teng Boo in 2010 and conducted by Capital Dynamics, aimed solely at educating individual investors about sound investing. It is not a profit-making event, and an individual has to pay a very small commitment fee of only RM80 to attend the whole day event. It is intentionally conducted only in a physical mode.

The annual Investor Day, each year costing RM800,000 to 1,000,000, is an unwavering commitment by icapital.biz Bhd and Capital Dynamics to its shareowners, clients and individual Malaysian investors. This year, on 26 and 27 October 2024, we will once again open the doors to a world of investing insights, innovation, and unmatched value at the Kuala Lumpur Convention Centre.

The 2023 Investor Day was a grand affair, complete with a trio of tracks designed to cater to varying levels of investment experience, showcasing our relentless dedication to investor education. This year, prepare for another unique experience with two carefully curated tracks and an additional half-day special talk on Saturday, 26th Oct 2024 designed to cater to different investment interests.

It is evident that icapital.biz Berhad is not just a financial entity but a pioneering force in the investment world. With its innovative approaches and unwavering commitment, it shall continue to set benchmarks in investor engagement and corporate integrity. To all who are loyal in supporting our cause, know that you are part of something truly exceptional. Together, we are not merely investing; we are shaping a future where individual investors are empowered, educated, and respected. Over the years, icapital.biz Berhad stands unparalleled - a gem so precious that it is irreplaceable. icapital.biz Berhad has thrived not through sheer size or extravagance but through an unswerving dedication to sound investing. The annual Investor Day, a hallmark of this dedication, embodies the very essence of what makes it exceptional. The best stock to invest in is still icapital.biz Berhad.

It is no wonder that Tan Teng Boo’s tireless efforts have earned him recognition from the University of Technology Sydney (UTS) as an Adjunct Professor; the first Malaysian to receive such an honour, no less.

Register now at https://events.icapital.biz and start or continue your journey of being educated on sound investing. Register so that you, your family, your friends and colleagues are among those who benefit from this truly unique investing opportunity.


i Capital Newsletter Volume 36 Issue 5

Value investing is not about timing the stock market or the economy. It is about buying when the price of a stock is attractive compared with its intrinsic value. Often, fund managers do not lack stock picking abilities, rather they are subject to frivolous factors that encourage them to over diversify to protect their jobs and assets under management.

As the original promoter and fund manager of icapital.biz Berhad, share owners can be assured that I stick to doing what is the right for all share owners of icapital.biz Berhad, rather than what is right for selected parties. Value investing is something akin to finding a suitable life partner.

Just because one is single and getting older does not mean that one should marry anyone. One has to find the right partner whose values one shares with. Similarly we hold cash and wait for the right opportunity to make investments based on our principles. Finding attractive stocks to invest with sufficient margin of safety remains our focus.


i Capital.biz Berhad 1Q2018 Report

Value investing requires an independent mindset and a long term investment horizon. Value investing is not always in favour and does not always outperform over shorter time periods.

Linked to value investing is the fund manager’s decision to hold cash. When bargains are scarce, value investors must be patient and holding at least a portion of one’s portfolio in cash equivalent awaiting future deployment will sometimes be the most sensible option.

Warren Buffett views cash as a perpetual call option, according to his biographer Alice Schroeder in her book “The Snowball: Warren Buffett and the Business of Life.” Schroeder says that one of the most important things she learned from many years of studying Buffett is that he perceives cash as a call option with no expiration date or strike price.


i Capital.biz Berhad 2Q2018 Report

Although a highly successful and proven investment philosophy all over the world, value investing is not well understood or appreciated in Malaysia. In the 6th edition of the Benjamin Graham’s classic, “Security Analysis”, Seth Klarman wrote a useful explanation :

“Value investing, today as in the era of Graham and Dodd, is the practice of purchasing securities or assets for less than they are worth - the proverbial dollar for 50 cents. Investing in bargain-priced securities provides a “margin of safety” – room for error, imprecision, bad luck, or the vicissitudes of the economy and stock market.

While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.

Winning, in a sense, was accomplished by not losing. Investors could achieve a margin of safety by buying shares in businesses at a large discount to their underlying value, and they needed a margin of safety because of all the things that could - and often did - go wrong.”


i Capital.biz Berhad 2Q2018 Report

Despite a turbulent environment, icapital.biz Berhad has again achieved a very strong performance with its share price outperforming the MSCI Malaysia in US$ by a huge margin.

The share price of icapital.biz Berhad has also outperformed the S&P 500 and NASDAQ, two top performing indices dominated by AI stocks like Nvidia, Meta, etc , in US$ in the same 1-year period.

This very strong performance of icapital.biz Berhad is a result of your Fund Manager and Designated Person patiently and deliberately sticking to its time-proven Bamboo value investing philosophy, despite being continuously harassed by one or two foreign wrecking balls.

If my 2023 prediction that the KLCI will hit 2,500-3,000 points in the next 3 to 5 years’ time come true, the price performance of icapital.biz Berhad will be very hard to beat, especially when you factor in the extra return from a possible discount swing to a premium.

i Capital.biz Berhad 4Q2024 Report

In the 2023 Investor Day of icapital.biz Berhad, I made a rare long-term outlook presentation of the Malaysian stock market. On Sunday, 5th November 2023, I explained that after a relatively long time, Malaysia is now in a sweet spot of sorts.

As part of my 90-minute talk, I predicted that over the next 3 to 5 years, the KL Composite Index (KLCI) would rise to 2,500-3,000 points. On Friday, 3 November 2023, the KLCI closed at 1,449 points. Since then, events have more or less unfolded the way I predicted back in November 2023.

At the point of writing this commentary now, the KLCI has risen 11.7% or 170 points to close at 1,619 points. The mood on the stock exchange is more upbeat. The question now is whether the Malaysian bull market will continue as predicted.

At this point in time, I do not have any reasons to revise my views and I continue to maintain my bullish forecast.

What about the future performance of icapital.biz Berhad? Again, in such a bullish market, I still expect icapital.biz Berhad to perform strongly in terms of its NAV and share price. In such a bullish environment, it is reasonable to expect the NAV discount of icapital.biz Bhd to disappear.

Should the present large foreign investors allow the stock price of icapital.biz Bhd to trade without any interference, then, the discount of your Fund will disappear at a faster pace and its stock price will then be able to trade at a rational level earlier than otherwise.


i Capital.biz Berhad 4Q2024 Report

In his annual shareholder letter, Warren Buffett gave some advice which is of great value to share owners of icapital.biz Berhad, whether large or small.

He said: "Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta."

My favourite part is this. He continued: "What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential."

Holding cash is always linked to value investing and looking “unimaginative” or “foolish” will sometimes be the most sensible option. Remember icapital.biz Berhad has RM267 million worth of call option with no expiration date or strike price.

Finding attractive stocks to invest with sufficient margin of safety remains our focus.


i Capital.biz Berhad 3Q2018 Report

icapital.biz Berhad is a Malaysia-focused fund, with an objective of long-term capital appreciation based on the eclectic value investing philosophy of Capital Dynamics. It is not allowed to sell short, invest in derivatives or undertake any borrowings.

Your worth transcends generations. We believe it is more than just a number on paper — it is a measurement of your uncompromising dedication to achieve success at every level throughout life. Your investment of that success with Capital Dynamics is something we take seriously.

We are rewarded by helping you secure and grow the worth of the generations before you and those that will come after. We believe this focus serves your best interests.

In fact, we founded Capital Dynamics on this very principle in 1989. We utilise 30 years of combined investment experience to secure your worth. It worked then. It works now. You invest. We return.


i Capital.biz Berhad 4Q2018 Report

icapital.biz Berhad is a Malaysia-focused fund, with an objective of long-term capital appreciation based on the eclectic value investing philosophy of Capital Dynamics. It is not allowed to sell short, invest in derivatives or undertake any borrowings.

“A wise value investor is an Old Fool, one who learns to be patient and understand it’s not how fast one’s investment appreciates, but how sustainable the returns are that matter.”

I said those words years ago, and finds that they are especially useful when present day investors are so focused on chasing returns.

i Capital.biz Berhad 1Q2019 Report

What Teng Boo has observed over the decades is that when a financial or economic crisis hits, individual investors have to bear the brunt, although in aggregate, they as taxpayers would be the ones who would have to bail out the financial system and economy. These acute observations have made a huge impression on Teng Boo and have had a transformable impact on his life and career.

Viewing this asymmetric fact of life as unfair and an assault on natural justice, Teng Boo has, early on, resolved and made it the mission of Capital Dynamics to help society's underdog, the retail investor, in an area where his contributions can have the greatest positive impact on society - investing.

Throughout his decades-long investing and business career, Teng Boo has always believed in empowering and championing individual investors. As part of his life-long effort, he has, through numerous means, encouraged university students to acquire knowledge of value investing and its benefits.

Under his leadership, Capital Dynamics organises the Budding Value Investor Award (BVIA), a global investment research competition that requires student participants to submit and present investment research papers, related to value investing. The BVIA is open to university students from all disciplines and from any country in the world.

Sponsored by Capital Dynamics and icapital.biz Berhad, the 2024 BVIA is not just a competition; it is a testament of our commitment to nurturing young talents in investment. Value investing is not just a strategy; it is a philosophy, a mental framework, and a discipline embraced by investing titans like Charlie Munger, Philip Fisher, Warren Buffett, and Benjamin Graham - an approach that drives success in both bull and bear markets.

While students who major in Business Administration, Finance, Accounting, Economics, etc. will benefit significantly through the practical application of investment and financial principles learned in school, students from all majors and disciplines such as Engineering, Law, Mathematics, Computer Science, History and more are also invited to participate in this exciting investment research competition.


i Capital Newsletter Volume 35 Issue 40

The share price of icapital.biz Bhd (ICA) has surged 58.45% in the 12-month ending 12 Jun 2024. This has greatly outpaced the MSCI Malaysia Index which has gained only 14.18% over the same period. It has also exceeded the 34.02% jump in the NAV of ICAP during the same 12 months. After this nice rise, what should investors or shareowners do next ? Sell, hold on or should investors actually buy more ICAP shares ?

As at Jun 2024, Tan Teng Boo has not changed his bullish views of the KLSE and of ICAP. So, despite the nice increase in ICAP's share price and NAV, there is a lot of upside potential for both these variables. An excellent time to buy is now or when City of London (COL) and its gang of bullies are hastily selling.

In the 2nd half of May 2024, COL and its gang of bullies sold hundreds of thousands of ICAP shares. As a result, the share price of ICAP was pushed down from RM3.44 on 14 May 2024 to RM3.16 as at 31 May 2024, breaking its rising trend. In less than 2 weeks, ICAP's share price fell 8.13%.

The NAV of ICAP on 14 May was RM4.17. By 31 May 2024, it went up to RM4.35. As a result of COL and its gang of bullies hastily selling (intentionally?), the NAV discount of ICAP widened from 17.51% to 27.36% in about two weeks.

There are a few lessons to take away from this episode.

First and foremost, it is so easy for a single large investor to manipulate the share price of a listed collective investment scheme like ICAP and hence its NAV-share price differential. The share price plunged 8.13% while ICAP'S NAV jumped from RM4.17 to RM4.35. The Malaysian regulators need to urgently revise and tighten the rules and regulations surrounding such investment products.

Secondly, the financial year of ICAP ends on 31 May each year. The hasty selling started shortly before 31 May and ends on 31 May. To manipulate the NAV-share price differential and hence to widen the discount ? To push down the share price performance of ICAP for its 2024 financial year, which ends on 31 May 2024?

Lastly and most importantly, when COL and its gang are selling, it is an excellent time for investors to buy ICAP shares. It is likely that they will be selling more ICAP shares in the future, whether properly or improperly. Grab them as the day will come when their selling dries up. When this happens, do not be surprised when ICAP trades at a premium to its NAV again. This has happened before - from Oct 2005 to 2008 when ICAP was unanimously owned by individuals.


i Capital Newsletter Volume 35 Issue 38

On 3rd Nov 2023, the KLCI closed at 1,449. On 5th Nov 2023, Tan Teng Boo gave his rare bullish outlook for the KLCI, where he predicted that the KLCI would hit 2,500 to 3,000 points in the next 3 to 5 years.

Since his presentation at the 2023 Investor Day, the KLCI has rallied around 170 points. If Tan Teng Boo's prediction is correct, the KLCI still has a long way to go.

This provides an excellent reason why he keeps recommending investors to buy icapital.biz Berhad, the perfect stock to hold for a prolonged bull market.

Nevertheless, no rally goes up in a straight line. The predicted 3 to 5-year bull market for the KLCI will be interrupted with small and big corrections. In fact, it is undergoing a small one at the moment.

Tan Teng Boo advises that the best stock to invest in such a confusing environment is icapital.biz Berhad especially when its share price is correcting now.

Besides, icapital.biz Berhad with the most innovative dividend policy in the world, still has over RM80 mln cash.


i Capital Newsletter Volume 35 Issue 38

icapital.biz Berhad is a Malaysia-focused fund, with an objective of long-term capital appreciation based on the Bamboo value investing philosophy of Capital Dynamics. It is not allowed to sell short, invest in derivatives or undertake any borrowings.

When Charlie Munger came to Berkshire Hathaway in the late Sixties, Warren Buffett was still investing the way his mentor, Benjamin Graham, had taught him - to invest in cheap, cigar butt type of companies.

When Munger arrived at Berkshire, he swayed Buffett away from Graham’s philosophy towards investing in quality companies at reasonable prices. Buffett did this with great success.

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stu pid, instead of trying to be very intelligent,” said Charlie Munger.


i Capital.biz Berhad 4Q2019 Report

Since 2010, Capital Dynamics and icapital biz Berhad have been spending a huge amount of money to organise the annual Investor Day for the benefit of the individual investors. The expenses typically add up to more than RM1 min, without being charged a single cent by Capital Dynamics for organising this huge and exhausting event. If a crowd of 2,000 people turn up, the cost per person will easily be RM500 and more.

To ensure that the people who register for the Investor Day actually turn up, a commitment fee of RM50 per person is imposed. To attend the Investor Day, the participant does not have to pay any other charges - only RM50. In short, if 2,000 attend the Investor Day, Capital Dynamics and icapital.biz Berhad have to bear the losses of at least RM450 per person or RM900,000 in total just for one year's event.

The contents in the Investor Day of icapital.biz Berhad are always top quality. Take the 7 corporate presentations in the 2023 Investor Day, held on Sunday, 5th Nov at the KLCC. Any investor who listened to the 7 corporate presentations and invested in the 7 stocks the day after the Investor Day would have all made good profit. Take a good look below.

[1] APM
The share price of APM on 6 Nov 2023 was RM2.09. After that, it jumped to a high of RM3.12. The vertical red line in the chart marks 2023 Investor Day.

[2] EUPE
The share price of EUPE on 6 Nov 2023 was RM0.88. After that, it jumped to a high of RM1.68

[3] HIBISCUS
The share price of Hibiscus on 6 Nov 2023 was RM2.68. After that, it reached a high of RM2.92. Among the 7 stocks, the price performance of Hibiscus has been affected by the flattish crude oil price.

[4] KELINGTON
The share price of Kelington on 6 Nov 2023 was RM1.52. After that, it more than doubled and reached a high of RM3.06

[5] MKH
The share price of MKH on 6 Nov 2023 was RM1.28. After that, it reached a high of RM1.43 and shareholders of MKH receive 1 share of MKH Oil Palm for free for every 7 MKH shares held. The share price of MKH Oil Palm reached RM0.65 upon its listing.

[6] OCK
The share price of OCK on 6 Nov 2023 was RM0.40. After that, it reached a high of RM0.65

[7] UNISEM
The share price of Unisem on 6 Nov 2023 was RM3.14. After that, it reached a high of RM4.18.

[8] ICAPITAL.BIZ BERHAD
The share price of icapital.biz Bhd on 6 Nov 2023 was RM2.78. After that, it reached a high of RM3.47.

An investor who attended the 2023 Investor Day and invested in all the 8 stocks after that would have achieved a 100% success. The share prices of the 8 stocks all rose after the 2023 Investor Day of icapital.biz Berhad. For this, the investor has to pay only a RM50 commitment fee.

In addtion to the 8 profitable stocks, the investor also gets to hear the accurate and bullish presentation of Tan Teng Boo, the managing director of Capital Dynamics. The KLCI closed at 1,464 on 6 Nov 2023 and it is now trading above 1,620.

It is now only May. However, it is never too early to mark it down in your diary for the 2024 Investor Day, Make plans NOW to attend Asia's most innovative investment event. Tell your family, your colleagues and friends early.

Is the Investor Day too good to be true ? The simple answer is, yes it is. It is too good to be true but it will be too foolish to miss attending the Investor Day.

Organising the annual Investor Day is part of Tan Teng Boo's heartfelt efforts to help the indvidual Malaysians invest soundly and have a better life. The Investor Day is not a profit making event. Make sure you are not scammed by the many scammers out there, just waiting to prey on you.

The 2024 Investor Day of icapital.biz Bhd will be held at the KLCC again on Sunday, 27th Oct 2024. There will certainly be a commitment fee to pay.


i Capital Newsletter Volume 35 Issue 36

For Malaysians who have been crying over the weakening Ringgit and rising cost of living, they have right in front of their eyes a precious Malaysian listed fund that has not only offered them currency protection but also superior wealth creation.

Despite a very tough and turbulent environment, icapital.biz Berhad has achieved a very strong performance with its share price outperforming the MSCI Malaysia in US$ by a huge margin in the last 1-year and 3-year periods.

The share price of icapital.biz Berhad has also outperformed the S&P 500 and NASDAQ, two top performing indices dominated by AI stocks like Nvidia, Meta, etc , in US$ in the same 1-year and 3-year periods.

This very strong performance of icapital.biz Berhad in US$ terms certainly did not happen by chance. It is the result of the persistent hard work and heart work put in over the years by Capital Dynamics and myself as the Designated Person of icapital.biz Berhad.

It is also a result of your Fund Manager and Designated Person patiently and deliberately sticking to its time-proven Bamboo value investing philosophy, despite being continuously badgered and disrupted by one or two foreign wrecking balls.

icapital.biz Berhad still has around RM80 million cash. With Capital Dynamics’ time-proven value investing philosophy, and icapital.biz Berhad still undervalued, it remains an excellent time to invest more in this truly low-risk, high-return investment.

A jump of 49.3% in its share price as the Malaysian stock market plunged nearly 18% in the last 3 years is indeed low risk and high return.


i Capital.biz Berhad 3Q2024 Report

What will be the target price of icapital.biz Berhad 3 to 5 years from now ? There are two possible positive outcomes.

[1]. Assume NAV of icapital.biz Berhad doubling from RM3.93 – to around RM7.86 in 5 years. If its share price equals the NAV of RM7.86 then, it will rise by RM4.81 or 158% from RM3.05 nowadays. If its share price then trades at a say a conservative 10% premium to its NAV, as the Malaysian stock market will then be in a bullish mood, its share price will equal to RM8.65 – a rise of RM5.60 or 184% from RM3.05 now.

[2]. The NAV of icapital.biz Berhad has in the past outperformed the KLSE by 6 percentage points per annum. So, if this pattern repeats and the KLCI doubles in 5 years, the NAV of icapital.biz Bhd in 5 years’ time will be RM10.19. Assume its share price trades at a 10% premium to its NAV, the share price of your Fund will trade at RM11.21 – a jump of RM8.16 or 267% from RM3.05 nowadays.

In short, the expected share price of icapital.biz Berhad in 3 to 5 years’ time will double to either RM7.86 or rally to RM11.21, a gain of RM8.16.

The above performance has not included potential contribution from the dividend policy of icapital.biz Berhad.
In the past, when nearly all the shareowners of icapital.biz Berhad were individuals, its share price traded at a premium to its NAV. In the coming years, I pray that this can be repeated so that your Fund can finally restore its real value. In that context, I would like to make a plea to the few recalcitrant investors (for the lack of a better term to describe them) not to act disruptively and destructively.


i Capital.biz Berhad 3Q2024 Report

In the Investor Day of icapital.biz Berhad held on 5th Nov 2023, I gave a radical bullish presentation on Malaysia’s longer term investment outlook.

In the midst of a recovery from the pandemic, worsening global geopolitical tensions, widespread political turmoil, soaring inflation, volatile exchange rates and extreme climate patterns, my simple advice 6 months ago was that now is the right time to invest in Malaysia and that icapital.biz Berhad is the best stock to invest in.

I continue to maintain these positive views.

My presentation was titled “Why Now is the Right Time to Invest in Malaysia.” The main reasons for my well-timed bullishness were China’s strong economic recovery, Malaysia’s new found political stability and the lack of a demoralising opposition.

What about the future performance of icapital.biz Berhad? First, let me very clear. icapital.biz Berhad will perform strongly in terms of its NAV and share price. Why?

I expect the KLCI to rise to 2,500 to 3,000 over the next 3 – 5 years. In such a situation, ICAP’s share price will jump. With the KLCI rallying, the NAV and share price of your Fund will rise together, and after many decades, there will be widespread bullish investor sentiment in the Malaysian stock market.

Moreover, the cash holdings of icapital.biz Berhad has fallen substantially in recent years, positioning your Fund for a strong growth in its NAV and share price. In addition, icapital.biz Berhad now offers the most innovative dividend policy In the world.

In such a future, it is reasonable to expect that icapital.biz Berhad’s NAV will more than double in 5 years – in the past, icapital.biz Berhad’s NAV has outperformed the KLCI by a big margin. In such a bullish market, ICAP’s discount will also disappear and a premium will arise.


i Capital.biz Berhad 3Q2024 Report

The NAV of icapital.biz Berhad, in absolute amount, is now more than RM550 million. It is time for Bursa Malaysia to include icapital.biz Berhad as a component stock of the KLCI.

With new infections in Malaysia falling, along with the re-opening of the Malaysian economy and RM210 over million cash in reserve, its NAV is expected to rise further. Will its share price follow suit ?

As its fund manager, my investing decisions influence the NAV performance of icapital.biz Berhad. On the other hand, the market price of icapital.biz Berhad is, positively or negatively, determined by investors, especially those who breached the 20% single shareholder limit.

Let me reiterate the power of compounding for the long term by quoting from the 2021 Annual Report :
“With icapital.biz Berhad, shareowners get a well-managed fund, founded on integrity, and offers excellent prospects. There is in fact no reason at all to wind it up -- why chop down a bountiful fruit tree before it has matured?”


i Capital.biz Berhad 1Q2022 Report

icapital.biz Berhad has always been managed in such a way that its shareowners can sleep soundly at night, knowing their hard earned savings are in good hands.

I have also managed icapital.biz Berhad in such a way that in times of crisis or dire need, icapital.biz Berhad is there for its share owners, witness the special RM28 million Covid Relief dividend.

Not only have I achieved all of the above, icapital.biz Berhad has also delivered superior returns to its shareowners and is still boasting a substantial cash-laden war chest.

A well-managed closed-end fund like icapital.biz Berhad is an excellent investment product for individual investors, especially during tumultuous times like now.

However, after so many decades, there is still only one listed closed-end fund on Bursa Malaysia. The London, Sydney and New York stock exchanges abound with closed-end funds.

For Bursa Malaysia to have the same percentage as London for example, the Malaysian stock market should see more than a hundred and thirty closed-end funds listed, instead of just one.

icapital.biz Berhad is without doubt a precious investment. Do not let any investor who refuses to be a share owner destroy such a rare gem.


i Capital.biz Berhad 3Q2022 Report

The performance of icapital.biz Berhad has been outstanding, not just in terms of its NAV but also its share price over many years.

Whether it is low inflation or high inflation, whether it is rising or falling interest rate, icapital.biz Berhad has consistently delivered superior returns to its shareowners and is still boasting of a substantial cash-laden war chest.

Let me recapitulate a fundamentally important point. A well-managed closed-end fund like icapital.biz Berhad is an excellent investment product for individual investors, especially during tumultuous times like now.

However, after so many decades, there is sadly still only one closed-end fund listed on Bursa Malaysia. The world-class London, Sydney and New York stock exchanges abound with hundreds of closed-end funds. Their investors have so many choices in terms of investment products.


i Capital.biz Berhad 4Q2022 Report

An airstrike on the Iranian embassy's compound in Damascus Syria killed seven Iranian officers on Monday, 1st Apr 2024. One of Iran's top soldiers, Brigadier General Mohammad Reza Zahedi, a senior commander in the Revolutionary Guard (IRGC) was killed. Blamed by Iran on Israel, the attack was a rare military strike on diplomatic premises anywhere in the world and marked a significant escalation in the Middle East crisis.

Iran's Supreme Leader Ayatollah Ali Khamenei has vowed revenge. The airstrike on Iran's embassy is a serious escalation of the Israel-Palestine crisis since the eruption of the Israel-Palestine Crisis in Oct last year. The most urgent impact is on crude oil price.

Crude oil price has been rising in recent months, due to both supply and demand factors. The Middle East Crisis and the Ukrainian Crisis have both impacted supply, in addition to the output cut by OPEC+. Demand has also held up well. Crude oil price is now at a critical juncture and looks poised to rally further . Its monthly MACD is turning bullish at its crucial zero-line.

A surge to test its previous high of US$145-150 per barrel or higher is likely. All it needs is a little matchstick to flare up the many tinderboxes, created by the United States. A surge in crude oil price in 2024 will make US monetary policy very complicated. It will quickly bring back soaring US inflation and the US economy and stock markets will crash. For the United States, it will be a well-deserved self-inflicted wound.

For now, i Capital retains its immediate-term outlook of the KLCI at a range of 1,460 to 1,600. See Stop Press for the latest. Subject to developments in the Middle East, i Capital is retaining its short-term outlook of the KLCI at a range of 1,400 to 1,900. Two issues ago, the medium-term and long-term outlook of i Capital was revised to 2,500 - 3,000.

In such an uncertain market, the best stock to invest in is icapital.biz Berhad.


i Capital Newsletter Volume 35 Issue 31

“To solve a problem, you need to remove the cause, not the symptom," said Liezi. Apart from Laozi and Zhuangzi, Liezi was also one of the most significant Daoist thinkers who lived in ancient China.

Solving a problem demands handling the root cause and not just the symptoms; the NAV discount is just a symptom of the underlying problem that your Fund needs the right type of shareowners, which it had for many years before the wrong type came in and caused the NAV discount to surface and persist.

By increasing your Fund's individual share ownership, we are addressing the root cause and finding a more lasting solution. Once again, do not let any investor who refuses to think and act like a share owner destroy a precious gem like your Fund.


i Capital.biz Berhad 2Q2023 Report

In a bullish Malaysian stock market, what is the best stock to invest in ?

icapital.biz Bhd is the best stock to invest in - A Low Risk, High Return stock. Why?

First, the performance of icapital.biz Bhd has been spectacular. Even when measured in US$ terms.

On a one-year basis, from 1 Mar 2023 to 29 Feb 2024, the share price of icapitalbiz Bhd jumped 34.07%, while the MSCI Malaysia fell 1.1%. In the same period, the S&P 500 rose only 28.36%. The NASDAQ Composite with Nvidia, Meta, etc rose 40%.

On a three-year basis, from 1 Mar 2021 to 29 Feb 2024, the share price of icapital.biz Bhd jumped 29.78%, while the MSCI Malaysia plunged 20.41%. In the same period, the S&P 500 rose 33.7% but the NASDAQ Composite with Nvidia, Meta, etc rose only 21.98%.

In short, on a one-year or 3-year comparison, icapital.biz Bhd's share price has performed better than either the S&P500 or NASDAQ Composite in US$ terms.

What about the future performance of icapital.biz Bhd ?

icapital.biz Bhd will perform strongly in NAV and share price. Why? The KLSE will be rallying, its NAV and share price will rise together, and there will be bullish investor sentiment. Cash holdings of icapital.biz Bhd has fallen substantially in recent years. In addition, icapital.biz Bhd now offers the Most Innovative Dividend Policy In The World.

With the KLSE expected to rally over the next 3 - 5 years, in such a situation, ICAP's share price will jump. Why?
icapital.biz Bhd's NAV will more than double in 5 years - in the past, icapital.biz Bhd's NAV has outperformed the KLCI by a big margin. In such a bullish market, ICAPs discount will also disappear and a premium will arise.

What will be the target price of icapital.biz Bhd 5 years from now?

[1]. Assume its NAV doubling from RM3.93 - to around RM7.86 in 5 years. If its share price equals the NAV of RM7.86 then, this will be a rise of RM4.81 or a 158% rise from RM3.05.

If its share price then trades at a 10% premium to NAV, as the KLSE will be in a bullish mood, it will equal to RM8.65 - a rise of RM5.60 or 184% from RM3.05.

[2]. The NAV of icapital.biz Bhd has in the past outperformed the KLSE by 6 percentage points per annum. So, if the KLCI doubles in 5 years, the NAV of icapital.biz Bhd in 5 years' time will be RM10.19 Assume its share price trades at a 10% premium to NAV, its share price will trade at RM11.21 - a rise of RM8.16 or 267% from RM3.05.

The share price of icapital.biz Bhd in 5 years' time will double to either RM7.86 or rally further to RM11.21.
The above performance has not included the contribution from the Dividend Policy of icapital.biz Berhad. Taking this into account will see even higher returns.

Briefly, the Dividend Policy of icapital.biz Berhad is shown below.

The innovative Dividend Policy of ICAP is an aggregate of:
Base Rate: 1% of NAV per share.
Top-up Rate: 8% of the difference between the share price and NAV per share.
The NAV per share = average of 4 weekly NAVs before dividend payout date.
The share price = volume-weighted average price (VWAP) over 4 weeks before dividend payout date.

The Base Rate dividend now is 1% of its RM3.93 NAV = 3.93 sen. In 5 years' time, with a NAV of RM10.19, the Base Rate dividend will jump to 10.19 sen.


i Capital Newsletter Volume 35 Issue 29

In the last quarterly commentary, I explained that despite a very tough and rough environment, icapital.biz Berhad has achieved a very strong performance with its NAV and share price appreciating handsomely. This strong performance has continued since then.

Over a 5-year period, your Fund’s share price has outperformed the gain of its NAV and the plunge in the MSCI Malaysia index. Your Fund’s share price jumped 21.59%, way ahead of the 16.88% rise in its NAV and the 19.88% plunge in the bellwether index.

What shareowners should acknowledge is the fact that the discount of your Fund’s share price has narrowed very substantially from a high of around 40% to only about 20% recently. This did not happen by accident.
It is the result of the hard work and heart work put in over the years by Capital Dynamics and myself as the Designated Person of icapital.biz Berhad.

The substantial narrowing of discount highlights one of the most important benefits of investing in a well-managed closed-end fund like icapital.biz Berhad. It allows an investor to enjoy 2 sources of returns – one from the rise in its NAV and the other, from the discount narrowing.

The strong performance of icapital.biz Berhad is a result of your Fund Manager and Designated Person patiently and deliberately sticking to its time-proven Bamboo value investing philosophy, despite being continuously harassed by a few large foreign wrecking balls.

Although icapital.biz Berhad still has around RM109 million cash, it has been investing more with its cash assets falling steadily.

With Capital Dynamics’ time-proven value investing philosophy, and icapital.biz Berhad still undervalued, it is actually an excellent time to invest more in this truly low-risk, high-return investment. A rise of 21.59% in its share price as the stock market plunges nearly 20% is indeed low risk and high return.


i Capital.biz Berhad 2Q2024 Report

I expect China’s economy to expand at another healthy rate in 2024. I am certainly not in the camp that sees China’s economy peaking or in crisis. In fact, when the current reforms are over, I see China’s economy becoming stronger in the coming years.

In 2023, while China’s economic expansion was uneven, it was of high quality, and it was setting the stage for China’s economy not only to expand faster beyond 2024 but for the 2nd largest economy in the world to be on a much stronger footing.

As I wrote in the iconic i Capital publication, “with wise and disciplined leadership, the new Chinese economy will be even more resilient, more robust and dynamic than before.” Like it or not, what happens to China is important to Malaysia.

In 2022, China remained as Malaysia's largest trading partner for 14 consecutive years with 17.1% share of Malaysia’s total trade, expanding by 15.6% to RM487.13 billion compared with 2021. Exports jumped 9.4% to RM210.62 billion and were the highest value ever recorded. China was also Malaysia’s largest import source, accounting for 21.3% of total imports, and jumped 20.7% to RM276.5 billion.

In the 2023 Investor Day of icapital.biz Berhad held on 5th Nov, I gave a rare presentation on Malaysia’s longer term investment outlook. My talk was titled “Why Now is the Right Time to Invest in Malaysia.”

Other than China’s economy propelling ahead, the political stability that Malaysia has been enjoying recently will allow the country to address her many structural problems.

In the midst of the pandemic recovery, geopolitical tensions, political turmoil, soaring inflation, volatile exchange rates and extreme climate, the future seems like a scary place to be in.

My simple advice then was that now is the right time to invest in Malaysia and that icapital.biz Berhad deserve a place in portfolio of investors. I continue to maintain that view.


i Capital.biz Berhad 2Q2024 Report

At the beginning, I asked a very vital question - should we still think and focus on the long term. It is very easy to sell an investment. You are told it is never wrong to take a profit or do not get emotional with your investment. Charlie Munger has a simple answer for this question.

"The first rule of compounding: Never interrupt it unnecessarily" - Charlie Munger

Munger's advice is one of the most important principles of compounding and a principle that few investors are aware of. Everyone acknowledges the power of compounding.

If you earn 15% per year for 35 years, you will end up with 133 times your money. Unfortunately, investors forget the arithmetic of this is heavily back-end loaded. After 35 years, you have 133 times; after 20, about 16 times and after 10 years, you have about 4 times. So, you do not want to interrupt that compounding unnecessarily.

You better have a compelling reason to sell a winning investment just because the stock has risen 50% for example. Otherwise, your sale is going to look really expensive years later.

A willingness to see your portfolio value rise, fall, and rise anew is required. You cannot get blown out or abandon ship every time the market has a correction. Otherwise, you interrupt the compounding of your investment, which in this case is icapital.biz Berhad.

The combination of Malaysia entering a new and better era, icapital.biz Berhad being able to hold more investments (although this is a function of stock valuation) and a high quality share ownership structure can produce an exciting future for your Fund's NAV and share price.

In the process, let us build and leave behind an icapital.biz Berhad that will be a role model for Malaysian individual investors, and other listed companies to emulate. This way, we can also do our part to contribute to a better Malaysia.


i Capital.biz Berhad 2023 Annual Report

From Oct 2005 to 6 Sep 2023, the MSCI Malaysia index gained 1.84% annually. In the same period, the NAV of icapital.biz Berhad jumped 7.90% annually and its share price compounded 6.61%. This strong performance of your Fund hides many important truths.

To uncover them, let me break this overall performance down into two distinct phases: one with a higher cash level and another with a lower cash level.

From Oct 2005 to Dec 2013 when the cash level of icapital.biz Berhad was lower (it fell to as low at 10.5% in 2009), the NAV of icapital.biz Berhad jumped 14.85% annually and its share price compounded impressively at 11.67% per annum.

In comparison, from Jan 2014 to Dec 2019 when the cash level of your Fund was much higher (it rose to an average of 63.4%), its NAV gained only 0.71% per annum and its share price was essentially flat, even though these were still much better than the MSCI Malaysia index.

Then, from Jan 2020 to Sep 2023 when the cash level of your Fund was falling again, (by Sep 2023, it has fallen to 26.4% from over 63% in end 2019), the NAV of icapital.biz Berhad is once again rising at a higher annual compound rate of 5.06%.

What is even more interesting is that its share price has been rising at an even faster pace of 6.73% compounded annually. At this rate of increase, not only will NAV parity appear, but there could hopefully be a premium again. A lot depends on the Fund having the right quality of share owners and the performance of its future NAV.

From day one, icapital. biz Berhad has been very consistent and disciplined with its value investing approach and therefore its asset allocation. When your Fund sees attractive value, it will invest.

Otherwise it will wait even though the Designated Person has been persistently and publicly harassed by a few certain large investors, parties who are not even share owners of your Fund, for strictly sticking to your Fund's value investing philosophy.

In 1985, Buffett has already cautioned:

"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."


i Capital.biz Berhad 2023 Annual Report

The Malaysian stock market has not been performing for a long time (incidentally, based on my 50 plus years of experience, there has been only one sustained Malaysian bull run, from end 1974 to June 1981).

For example, when measured from 2002 to 2022, the Jakarta stock market recorded an impressive 14.58% annual compounded gain. In that same period, Malaysia generated only 3.71%, just a tad ahead of Singapore. If measured from 2009 to 2022, Jakarta stock market still clocked in an impressive annual 12.26% compound gain.

In that same period, Malaysia generated a pathetic 3.88%, even lower than Singapore. The stock markets of Thailand, the Philippines and Vietnam also generate much higher returns than Malaysia. Is Malaysia doomed for more of the same ?

From a macro viewpoint, Malaysia's domestic political development has entered a new stage, one which I think promises a better and stable government and hence a better Malaysia. Many Malaysians do not realise that Malaysia's 4th/7th prime minister has had a devastating impact on the country, even when he was not prime minister.

For example, he incessantly attacked prime minister Abdullah Badawi's policies even though most of them made good socio-economic sense to Malaysia and should have been implemented instead of being blocked. Now, thankfully, this extremely wasteful and irresponsible era is coming to an end.

With Malaysia blessed as a country with great and plentiful human talents, the anticipated new era will give birth to a country which will once again be on the right path of fulfilling her potential. I expect the Malaysian stock market to be a beneficiary.


i Capital.biz Berhad 2023 Annual Report

Should we still think and focus long term? A short answer is yes. The experience of a still sprightly Mr Yee is very enlightening and inspiring. He was already more than 70 when he first invested in icapital.biz Berhad, at an age where others would have quit.

Before one knows it, almost 19 years have whisked by. I am now 69 and by the time I reach 89, icapital.biz Berhad will have been around for another 20 years. As your Fund's Designated Person, I see a very attractive future ahead for icapital.biz Berhad.

First, after its 2005 inception, icapital.biz Berhad was for many years enjoying a nice premium to NAV as it attracted the right quality of share owners. As I have explained before, share owners, existing and future ones, ultimately bear the responsibility of determining the market price of a listed company especially one such as icapital.biz Berhad.

The type and quality of share owners matter. To be sure, Mr Yee is not the only long-term individual share owner of icapital.biz Berhad shares; there are many others like him with a similar mindset and there are many more out there whom we can appeal to.

I have also explained elsewhere that we have started a long-term strategy/campaign to improve the type and quality of your Fund's share owners and voting structure with a view of getting back to as close as we possibly can to the initial years (I shared some of these ideas in last year's AGM).

There are many components in this exciting strategy, which includes the recently announced innovative dividend policy, the launch of an ICAP Fan Club, increasing individual ownership of your Fund, and having a much fairer voting structure for a collective investment scheme like icapital.biz Berhad and many more.

Throughout the last 20 years, icapital.biz Berhad has undergone a unique journey albeit one with a clear public mission. The next 20 years will see more of these.

To be sure, it is going to be a long haul and to eventually succeed, we will need the support and co-operation of all like-minded individual share owners. Unfortunately, there are a few large voters/ parties who do not think like long-term share or business owners, who are focused on stock prices and act more like your Fund's wrecking ball.

A member of this group joined a forum in 2019 and has since then posted 475 comments, 92% of them of which are on icapital.biz Berhad and are negative. It is useful to repeat what Warren Buffett advised in his 1985 Berkshire Letter :

"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."

We will work hard and with our heart to attract and maintain appropriate high quality ownership in icapital.biz Berhad. Your Fund can go back to a premium or close to one as we continue with this next exciting phase of your Fund's unique mission.


i Capital.biz Berhad 2023 Annual Report

Q8 Did you get to know Teng Boo much earlier on already?
Mr Yee: Yes.

Q9 How did you come to know about Teng Boo?
Mr Yee: From the i Capital newsletter. As a matter of fact, I even talked to Mr Tan long long ago. I was in trouble with shares, and I rang up i Capital office and it so happened that he was not overseas or anywhere, and he spent time to advise me. And because of the advice, I managed to get out of it at least in a small way.

Q10 Why did you want to invest for the long term when you were already in your 70s?
Mr Yee: Actually, I keep it because I have other investments so l can afford to keep it and I can pass it on to my children and grandchildren. And as Mr Tan says, it's for long term. It's not for the short term. Long term means as he says in decades: It is not a few years, not three days. So, it is okay and I think US financial, economic problems are overdue, you know. The Big Depression that will come in 2025 or even earlier I don't know. But what I know, even now, i Capital is doing fine and as the time comes, and when it comes it will be quick and sudden. And I'm sure Mr Tan and the team will definitely know how to pick up undervalued stocks and will pass them to my children, and no problem. It's a good time. It's a bad time for certain people. It's a good time for closed-end fund, for icapital.biz Berhad.

Q11 What makes you believe in i Capital and Tan Teng Boo?
Mr Yee: I admire Teng Boo as "The Thinker of The East", and another thing I admire him is, I don't know where he gets his energy, he doesn't seem to sleep! I don't know, I don't know his private life but from what I know, from what I read, he is full of energy. And the thing that impressed me is he is a very enlightened person; he knows so many things. Not only is he an investment guru but sometimes he throws a little bit of philosophy, you know and the world culture, political system, not everything that one can think of, especially on China. People like us even in my age I also don't know enough about China but he knows so much about China. Not many people have knowledge of that. So, that alone really is enough for me to admire Mr Tan Teng Boo.

Q12 What would you tell someone who is considering investing in icapital.biz Berhad?
Mr Yee: For the young people, yes, I will tell them. I will say, this is the opportunity of a lifetime. Yes. And this depression coming maybe even worse than 1930, it is a historic epic decline you know, a collapse. It's going to be very bad. The young people like you, need to prepare and hope for the best.

TTB: As another senior citizen, what is the hope for the future of Malaysia? You didn't migrate, I didn't migrate.
Mr Yee: If Anwar can continue, and they take 5-10 years maybe, 2-3 more elections maybe will be okay. If Anwar is in charge maybe yes, I hope. There is some hope for everybody.
TTB: I asked you that question that is not investment related but because sometimes, obviously, you love the country, I love the country, that's why. So, sometimes when we look for all kinds of directions, we look for all kinds of clues.
Despite our age, sometimes, I have no answer.
Mr Yee: Despite your knowledge ......
TTB: I am not a religious person, I am not a Christian, I'm not a Buddhist and so on, I'm more.. in terms of philosophy, I am more of a Taoist. The thing is if we look through history, if we looked through all the philosophy and so on, what is going to be the future of Malaysia?
Mr Yee: Well, Malaysians may have some hope if there is a shift from the west to the east. As I remember, Xi Jinping mentioned "history will prove that we are right, on the right side of history" So if that come to path and as you know, and you wrote a lot about Anwar going to China, he should know where he should go to, so it should be okay. Long term of course maybe 10 or 20 years, maybe the next century for your children, your grandchildren maybe. For us...
TTB: At our age, it is not about dollar and cent anymore. At our age we have got enough whatever it is already. But more importantly is, what we leave behind. What sort of society, what sort of country we leave behind. Thank you.


i Capital.biz Berhad 2023 Annual Report

In this 2023 annual report, we are pleased to feature an interview with Mr Yee Kwok Leung from Johor Bahru, one of the individuals whom we managed to attract back in 2005. He now is the most senior shareowner of icapital.biz Berhad and intends to own his shares forever.

Introduction
Mr Yee: 1 am now 89+ years old already. I live in Taman Nong Chik, Johor Bahru. I am very happy to be able to meet all of you especially Mr Tan Teng Boo whom I always admire as the Great Thinker of the East. You know, people compare him to Warren Buffett of the West, but I call him the 'Great Thinker of The East".

Q1 What were you doing before you retired?
Mr Yee: I was a civil engineer.

Q2 How long have you been investing in the stock market?
Mr Yee: More than 60 years. Like Mr Tan, he was involved in investment, very very long. Same.

Q3 When and how did you discover icapital.biz Berhad?
Mr Yee: When did I discover? Maybe 15 years ago? From the very beginning, from the inception of icapital biz Berhad (in 2005).

Q4 How did you discover it? Your friends? Your family?
Mr Yee: All by myself. I am quite interested in stocks and shares since very young.

Q5 So, is it because of the IPO?
Mr Yee: Yes, yes.

Q6 What attracted you to icapital.biz Berhad?
Mr Yee: The company. Although I invest in other things but I still think long term investment is also important and as Mr Tan always says "value investing is very important" and that is how I landed.

Q7 When you first invested in icapital biz Berhad in 2005, you were already 73 years old. What was your reason for buying shares of icapital.biz Berhad?
Mr Yee: I have full faith in i Capital, Capital Dynamics managed by Mr Tan.

Closed-end funds are typically launched when the stock market is exciting. This is understandable, as it is difficult to raise the desired funds during poor market conditions.

In addition, right from the very outset of its initial public offering in 2005, I wanted to appeal only to a certain type of investors to icapital.biz Berhad and hence requested that I directed the initial public offering.

Consequently, shareholders in icapital.biz Berhad have been referred to referred to as share owners. As we explained in the first annual report, "holding" implies something transitory while "owning" implies a more permanent state of affairs, just like a business or property owner is not described as a holder but as an owner.

Eventually, the initial public offering of icapital.biz Berhad took place in less than exciting times. As a value investor, this was intentional.

However, despite local stock market conditions that were not buoyant, the offering of icapital. biz Berhad was heavily oversubscribed, illustrating the sophistication and wisdom of many investors then.

In addition, unlike many closed-end funds that trade at market prices below their net asset values, icapital.biz Berhad traded at a premium after its listing, once again testifying to the soundness of value investing and the wisdom of investors.

For icapital.biz Berhad to close on its first day of listing in 2005 at a premium to its NAV was a huge achievement and beyond the wildest expectation of many people.

Given how hard Capital Dynamics and I worked and the strategy I deployed in making sure that icapital.biz Berhad appealed only to the right investors, the premium to NAV was not a surprise. As we quoted Buffett in our 2007 annual report, "The key to a rational stock price is rational shareholders, both current and prospective ........."


i Capital.biz Berhad 2023 Annual Report

I have often asked myself whether our shareowners are aware or remember why icapital.biz Berhad was created in the first place. Unlike other listed Funds or listed companies, icapital.biz Berhad was intentionally set up with a unique objective on top of a social mission.

As I explained to the High Court judge in the Defamation Trial against a senior editor of The Edge in 2018, the journey I undertook in launching icapital.biz Berhad was like a crusade with the aim of building a better Malaysia.

Similarly, unlike the many conventional closed-end funds found in developed financial markets like New York, the success of icapital.biz Berhad can only be fully appreciated if it is viewed against its original motivation. I set up icapital.biz Berhad more than 19 years ago and got it listed in 2005 for one simple reason : to allow long-term shareholders or more aptly called share owners, to benefit from value investing.

Investing in your Fund allows the power of compounding to work for you. If we succeed in achieving this, we would have also shown that serious long-term investing in Bursa Securities can offer superior returns. The objective was not just narrowly financial - to show that compounding works over the long term - but it also was broader and to demonstrate that sound long-term investing by individuals can work in Malaysia.

Achieving such a long-term socio economic objective is an important part of nation building and can bring about many positive contributions to the development of this young country and its capital market. It can also help bring about a better society. When embarking, we genuinely believe that every Malaysian can help in this journey.

I hope that Malaysians of all ages can realise that we have een trying extremely hard since 2005 to build icapital. biz Berhad into a very different and precious corporate entity, one that is more than just delivering superior annual compound returns. For example, the highly successful Investor Day of icapital.biz Berhad has been organised based on similar socio-economic objectives and public mission.

To put it simply, successfully building icapital.biz Berhad is akin to building a better Malaysia. To me, they are synonymous.


i Capital.biz Berhad 2023 Annual Report