Companies going for IPO

Hi Folks! Many of you may have heard in the newspaper or in the radio regarding companies going IPO. IPO is a short form of Initial Public Offering. Companies that prefer to be listed in the securities exchange are requesting for funding for their company expansion. This would then allow the retail investor to become a shareholder of the company.

Why do they want to issue more shares?

You may have wonder why would they prefer to open to the retail investors when there are other alternative to seek for funding. Generally, you need to think in businessman point of view. For example, a company has good business model and it can expand further. It projected to generate double to the amount that the company is earning. The company has good credit rating. The company can choose to take a loan from the bank or get listed to seek funding from retail investor. Consideration by the company is essential to determine which best suits their needs. If the company feels that 80% possibility that the expansion would be successful, it would be best to go ahead getting a loan from bank(only if they offer a good interest rate). If the company feels that the possibility would be lower, it would be best to be listed at securities exchange. But please bear in mind, this is not always the case. This is just one of the possibilities. You still need to read the company portfolio and profile if the company ever wanted to be listed in the securities exchange. You may sometime get the hint of why they required further funding. Best of all, if you ever wanted to try to bid in the IPO, try find those who actively investing or online. I am sure people will share their opinion of the company. This would give you an add on for your judgement to decide before bidding. Very very important.

Items that you wish to read/do before bidding?

1) Company prospectus (Reasons for listing) - you can find it in SGX website.
2) Online review by other blogger - you can get a summary of the company profile and their judgment.
3) Business Times - It is a good source to get some additional highlights.
4) Own Finance - Make sure you have the money being put aside for investment. Never ever use your savings that you require for day to day. Remember, it is not a get rich quick method.

How do i bid companies going for IPO?

2014 was quite a hit for companies to be listed in Singapore Exchange. There are a couple of well known companies that shows interest. This year has been quite slow and you may not see it often. If you have open your investment account, you will also be given the CDP account. CDP account is essential for you to bid for the IPO price. You need to head down to any of the ATM that you have an account with the bank. It would be a one time "registration" and you would not need to key in anymore on your next bidding. BUT....if you previously use DBS to "register" your cdp account. You would need to do the same if you are using either UOB or OCBC ATM. I would normally bid using two banks if i have a strong feeling that it is a good buy or i can sell at the first day of opening. There will be a fee of $2 dollar for every bidding. Normally, the open bidding would last for a week. Advisable to bid on the first and second day because probability is higher to get your shares(Based on my experience). The outcome results will normally out a few days after the closing of the bidding. You would be able to know the results through your account.

Hope this helps!=))