What Do You Think of ICap's Recent Disposal Of Shares Held?

I would like to focus on Mr. Tan Teng Boo's market views here.

Posted Jan 5th 2008, Corridors of catalysts

• Capital Dynamics Asset Management managing director Tan Teng Boo, who is presently a net buyer of equities, opines that equities should fare well: “The CI performance should be good. The investment exposure in Malaysia is slightly different. We have palm oil that is doing well, and you don't get palm oil in any other part of the world.”
  
  He adds: “The success of palm oil will filter down to society, to the Felda settlers first for instance, and then to the consumers. While consumers will feel the pinch from high oil prices, on a net basis, private consumption should be resilient,” he says.
  
  Crude palm oil futures recently rose to a historic high of RM3,097 per tonne on Dec 27, spurred by the spike in crude oil prices to US$97 a barrel mark.
  
  Rising consumer spending
  
  Last year, there was an estimated 12.6% growth in consumer spending – the strongest since the 13% growth recorded in 2000. This was also on the back of a recovery in passenger vehicle sales since mid-2007.
  
  Tan adds that wages are also rising, and this is one reason why oil prices have held at current levels.
  
  Consumer's disposable incomes have risen, and that is why oil prices have held. If those incomes did not rise, oil prices would not be sustainable, and we would have seen a slowdown in the economy,” he says.
  
  Aseambankers Research economist Suhaimi Ilias says the slow pace of the 9MP implementation has turned out to be a blessing. Presently, less than a third of the RM200bil development spending allocated have been utilised.
  
  “With robust private expenditure growth in 2007, the Government had the luxury to refrain from over-stimulating the economy. Given the higher downside risks to growth as we enter 2008, the Government can therefore use its outlays as a counter measure. In addition, there is the expected rollout and commencement of more major infrastructure projects from 2008 onwards,” he says.
  
  In addition, the Government has unveiled three major economic regions – the Iskandar Development Region, Northern Corridor Economic Region and Eastern Corridor Economic Region with total development expected to exceed RM640bil over the next 13-18 years.
  
  Corridors of catalysts
  
  Tan says that if the corridors are implemented efficiently, it can be a strong catalyst for the market.
  
  “The Iskandar Development Region (IDR) looks good on paper, especially with some of their ideas, for example allowing qualified foreign professionals to come into the IDR without passports. That would make the IDR very attractive.”
  
  The main issue here is when the Government will actually start the spending. “Will it take another year, maybe 2009 or would all end-up in 2010?”
  

Posted Jan 19th 2008: Analysts and fund managers weigh in on scope of Dow’s impact

• Tan Teng Boo
  Managing director
  Capital Dynamics Asset Management
  
  Whether the Dow would continue to fall or rally depends on the Fed, which should be more aggressive in cutting the interest rates. The continuous fall in the Dow currently is due to weak investor sentiments as a result of poor economic fundamentals and expectations of more interest rate cuts.
  
  The KLCI is resilient as it is not over-valued with sectors such as palm oil, which is doing well. The KLCI would continue to perform despite a slowdown in the US.
  
  We expect China and India to continue to grow despite the US issue and help sustain other world markets.

Posted on March 8th 2008, Dare to be contrarian

• If there is a contrarian view currently playing out in Malaysia in relation to the prognosis of the US economy, it’ll have to come from and not surprisingly, the frank and candid Tan Teng Boo – a man with a wealth of experience on equities who currently heads Capital Dynamics Asset Management Sdn Bhd.
  
  And it is for that reason that while many market pundits have written off Asian equities for the time being, he remains unabashedly bullish.
  
  His take is largely premised on the fact that the US is not faced with a doomsday scenario but a slow-paced softening in economic conditions that is easier to stomach for the rest of the world.
  
  “Firstly, the subprime problem remains just that – subprime. Secondly, while many large financial institutions have been badly hit, the central banks have successfully averted a credit or liquidity crunch scenario. Thirdly, the US economy is certainly slowing down but a recession is only a possibility, and not certain.” (do read rest of the lengthy article here )

So Mr. Tan does sound rather bullish on the market, yes?

And since Mr.Tan's I-Capital has a massive following, I was rather interested in its quarterly earnings announced last night.

The below is a snapshot from their earning notes.

Oh my. ICapital during this period, has disposed securities worth 50.999 million!!

Do not get me wrong here. As a closed end fund, there is nothing wrong with ICapital selling securities at all.

However, don't you think these action simply contradicts, as everyone in the market knows that Mr.Tan is a rather bullish on Malaysian equities and he's been quoted so many times in the media.

So don't you think it's rather strange that he tells everyone he is a bull but on the other hand, he's been a seller?

How?

Do you like what you see?