TICL | TCCIA Investment - Valuation Report - November 2022

    Historically, listed equities have been more than 80% of TICL’s investment holdings. Since 2018 the company began to diversify away into Treasury bonds, after a series of sluggish performances in the equities market. Until 2021, the equity portfolio had dropped to 54% of the total investment holdings, while Treasury bond holdings rose to about 45% of total holdings.

    Within the period, investment income grew at a CAGR of 17%, mostly from interest income and dividend growth from NMB. TICL’s average dividend yield from its equities’ portfolio for the last five years is 4.3% while the average coupon yield from the fixed income portfolio during the same period stands at 13%. As a result, interest income has accounted for more than 70% of the company’s total investment income in the last two years, up from 15% in 2017.

    Dependent on the implementation extent of the on-going diversification strategy, dividend income is expected to grow in the near future, especially from NMB and CRDB, as the two banks maintain a growth streak that began in 2019. Marginal investments into bonds are expected to yield lower than historical returns, following the central bank’s long-term accommodative measures aiming to increase liquidity in the economy.


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