glp and mit

in

Realised that every entry is becoming rather melancholic and morose again.

Henceforth, he's no longer going to write about pseudo-philosophical issues but focus more on contemporary ideas.

(No one's going to be influenced for the better by his consuming - currently futile - search for meaning in life.)(He's going to make private every single contemplative post.)

Perhaps, write about something more useful so that the ~200 pageviews/month is justified and friends leave with more practical knowledge.

On recent IPO

Global Logistics Properties, MC0, $1.93/share, 18 times oversubscribed, opening price: $2.16/share

Mapletree Industrial Trust, ME8U, $0.93/share, 35 times oversubscribed, opening price: $1.15/share

Both shares experienced a whooping 20-25% jump in stock price on their debut. If you've applied for these shares and was lucky enough to get them, it'd really be a windfall. *gasps*

IPO

Initial Public Offering (IPO) refers to the act of listing a company on a bourse - in this case, Singapore Exchange - so as to raise funds for further expansion, pay off cumulative debts and raise profile of the company.

Anyone who has shares of a company, and therefore, a stake in the company, will be known as a shareholder. (If you buy the really cheap shares, like at $6 per lot, you can be a shareholder too :] )

For every IPO, they will have institutional investors and cornerstone investors who will buy more than 80% of the shares before public listing.

Institutional investors - speculative funds, sovereign wealth funds, banks, corporate entities etc
Cornerstone investors - a homo sapien individual with lots of money

The leftovers will be left for retail investors - aka - will ballot for the remainder. The just have to be satisfied with the scraps.

Why apply?

For capital appreciation in this age of non-existent interest rates.

If you're saving all your money in the bank, make no mistake, their absolute value will not drop. $10 000 will still be $10 000 after 10 000 years.

However, their relative value will definitely drop, due to inflation etc. $10 000 in 1890 can buy you enough land to build a sprawling bungalow; $10 000 in 2010 will put an area big enough to put a single bed.

IPO balloting

It is really based on luck.

For GLP, if you applied for 1-10 lots, you'll be allocated 1 lot. Results summarised below:
1 -10 lots applied: 1 lot allocated
11-20 lots applied: 2 lots allocated
etc

For MIT,
1-20 lots applied: 1 lot allocated
21-30 lots applied: 3 lots allocated
etc

(Not very sure about the above data, simply quoting from memory but it should be accurate enough.)

Retail investors will be split into bands - like em1, em2, em3 in primary school, erm, no link - before they're randomly chosen and given the shares.

IPO results

You can get your results from the ATM.

I can assure you that it is very exciting. It is like getting back A level results from the machine that normally gives you money.

Instead of spewing out red and blue notes, the machine will show your IPO application results on the screen and spit out a piece of paper stating the corresponding results. Kind of paiseh when there are people queuing behind you and perhaps wondering why you're spending so much time at the ATM but not drawing any money.


This is the gist of an IPO. Of course, the whole process is far more complex and intriguing. Feel free to read up more on it.

P.S. very suay didn't get any MIT shares. sian
P.S.S. did get one lot of GLP though :] life sort of balances everything, doesn't it?

0 comments: