iCapital Lost 14 Million In Axiata Without Explaining Why

Posted back in April 2009: iCapial And Their Potential 12 Million Ringgit Paper Losss In Axiata

It's rather strange how that posting came about. Last April I wrote A Quick Look At iCapital's Quarterly Earnings. In it I stated rather 'strongly' against the earnings notes because I felt it was lacking.

• If I am an investor of this fund, surely the Fund Manager of this company should be more transparent in its earnings notes. To tell the reader that the company will continue to seek stocks that are attractively priced is not sufficient. It is so lacking. Surely, it owes to the shareholders of the fund, a much better market view and commentary. Just to say that the stock market is depressed is not up to standard. That's my blunt opinion.

Now that lead to iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings

And then one thing lead to another and I end up with the following postings.

1. A Quick Look At iCapital's Quarterly Earnings,
2. iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings,
3. iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings II
4. iCapital.Biz Lack Of Disclosure In Their Quarterly Earnings III
5. A Quick Look At iCapital's Annual Report 2008

Which ultimately lead me to iCapital's Investment In Axiata and iCapial And Their Potential 12 Million Ringgit Paper Losss In Axiata

The last posting iCapial And Their Potential 12 Million Ringgit Paper Losss In Axiata was written on 15 April 2009.

Now it's 25 June 2009. And if counting is not flawed, it's more than 2 months later.

On today's Edge Financial Edge, iCpaital made the 'shocking' announcement.

ICapital.Biz posts RM11.6m net loss in 4Q

LOL!

How ironic it was that last night I was COMPLAINING about Apollo Food Holdings dabbling in the share market and making peanuts from their playing in the share market. ( see A Look At How Apollo Food Holdings Dabble In The Share Market )

Well it looks like Apollo Food Holdings is an investing genius compared to iCapital! LOL!

Sorry that's rather wicked but there's some truth in it somewhere.

Ok humour aside but this event SHOWED clearly why iCapital needs to be more transparent. As said before the lack of details in their earnings notes was rather shocking.

And iCapital's losses in Axiata... much bigger than anticipated!

Also very ironic that in May 2009 Capital Dynamics Tan Teng Boo Now Claims That Markets Have Bottom Few Months Ago!

• KUALA LUMPUR: ICapital.Biz Bhd posted a net loss of RM11.60 million for the fourth quarter ended May 31, 2009 (4Q09) with negative revenue of RM11.83 million due to loss on disposal of investments of RM14.16 million.
  
  In contrast, it reported a net profit of RM1.70 million on the back of RM3.69 million revenue for the previous corresponding period.
  
  Its poor performance was mainly due to losses from selling shares of Axiata Group Bhd (formerly TM International Bhd) in 4Q, ICapital.Biz said in notes accompanying its financial results yesterday. It sold off all its Axiata shares and invested in Astro All Asia Networks plc instead.
  
  ICapital.Biz’s net asset per share rose to RM1.42 from RM1.37 but its net asset value (NAV) declined by 9% to RM1.77 from RM1.95.
  
  “As the company is a close-end fund, a better indication of its performance would be the movement of its NAV,” said ICapital.Biz.
  
  Basic loss per share stood at 8.29 sen versus basic earnings per share of 1.21 sen in FY08.
  
  No dividend was declared for the quarter.
  
  For the full year, ICapital.Biz’s net profit plunged 84% to RM6.27 million from RM39.08 million. Revenue fell 75% to RM11.41 million from RM45.67 million previously.
  
  Cash and cash equivalents for FY09 halved to RM37.44 million from RM61.23 million.
  
  The company said its prospects were dependent on the performance of the stock markets, particularly where its investments were held.
  
  Although the local stock market had rallied in recent months, it said the rise had lagged that of other markets.
  
  
  This article appeared in The Edge Financial Daily, June 26, 2009.

Anyway, I decided to check out iCapital comments in its earnings notes.

And again, I find it so lacking.

Now the fund has lost a whopping 14 million in Axiata, which was slightly more than expected.

That iCapital did not bother to explain why it sold this innvestment is so shocking!

Comeon.. doesn't it think that the investing public has the right to know why it sold?

Show some respect, yes?

Tell the public why you sold.

And whatever happened to iCapital's so-called long term investing strategy?

And also what took it so long for iCapital to disclose this losses?

Two months is an awful looooong time in the investing world!

If I were an investor, I would be less than pleased!

How?

ps. the least I know on iCapital's commentary on Axiata was the following short note which a kaki posted for me back sometime in July 2008.

• Conclusion and Advice
  
  At RM5.85, TMI is capitalised at RM21.9 bln. For this, what do investors get in return ? Indonesia, Sri Lanka, Bangladesh, and Cambodia present TMI with a total untapped market potential of 280 mln subscribers. In the case of India, the potential is 860 mln subscribers. TMI’s venture in Iran and Pakistan could provide opportunities for TMI to take up interest in some of the cellular operators. The Iranian government’s intention to privatise MCCI could be one of such opportunities. Thus, one can see the potential that TMI is tapping into.
  
  In many aspects, TMI is indeed a truly global company. In all the markets that TMI is in, TMI is competing head-on with the giants of the industry. As shown by the above analysis, most of its operations are competing well. Adding to its high growth assets are two strong cash generating companies, which are Celcom and M1 that will help to finance part of TMI’s cash needs.
  
  In short, i Capital sees the recent plunge in TMI’s share price as not being in line with the group’s increasing attraction. Thus, i Capital revises its rating to a Buy for the longer term for TM International.
  
  Disclosure of interest (required under the Capital Markets & Services Act): The publisher and associates have an interest in TM International.