ICapital incurs net loss in Q2

PETALING JAYA : ICapital.Biz Bhd reported a net loss of RM339,000 for the second quarter ended Nov 30, 2015, marking a second consecutive quarter of losses.

On a year-on-year basis, the firm reported a net profit of RM4.91mil in the first quarter of financial year 2016.

Revenue for the second quarter amounted to RM2.83mil compared to RM7.12mil a year ago.

In a filing with Bursa Malaysia, ICapital said its first quarter results were impacted heavily by impairments made relating to its investment in Parkson Holdings Bhd.

It reported a net loss of RM9.28mil in the first quarter, with total impairment losses amounting to RM10.46mil.

ICapital’s net assets as at Nov 30 amounted to RM412.49mil, an increase from RM405.62mil in May.

“As the company is a closed-end fund, a better indication of its performance would be the movement of its net asset value (NAV). The NAV per share as at Nov 30, 2015 was RM2.95 compared to RM2.90 as at May 31, an increase of 1.7%,” it said.

The listed fund’s open market shares have historically traded at a significant discount to its NAV.

Over the past year, ICapital’s stock has fluctuated between RM2.10 and RM2.40, compared to its current NAV of RM2.95. It closed at RM2.29 on Wednesday.

In a commentary on the market’s prospects, ICapital forecast that the global economy faces a structural slowdown or recession scenario, which could last until 2017 due to an expected weakening in global trade and insufficient demand by consumers.

“Growth in world trade has been weak and has been below world gross domestic product growth, which is a rare and worrying trend. It is not the typical cyclical recession or caused by monetary tightening in reaction to rising inflation,” it said.

Meanwhile, City of London Investment Management Co Ltd has continued buying up ICapital shares in the open market.

A separate filing on Jan 13 shows that it acquired 224,000 ICapital shares between Jan 6 and 12, bringing City of London’s stake to 15%.