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Companies to introduce shares to CSE, rather than make public offers

+8
smallville
Fresher
Monster
xmart
G
Meta Trader
kiri
MarketResearch
12 posters

Go down  Message [Page 1 of 1]

MarketResearch

MarketResearch
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

I saw some articles that there would be 50 + IPOs are coming in next months/years and most companies going to introduce the shares directly to the CSE and not a IPO.

Then can not we buy the shares at a fixed price as we purchase via a IPO.
Could you kindly tell us what is happening when a share directly introduce to the Market.

If I correct this happened to CDB and It came to market Rs.65 or Rs.70/=

Please give your comments on this issue..................

Please read the article regarding this at:

http://srilankastockpicks.blogspot.com/2011/02/many-companies-to-introduce-shares-to.html

Thanks.

kiri

kiri
Manager - Equity Analytics
Manager - Equity Analytics

in this situation how can company decide the price of a share. if first day arise high demand how can allocate share for them?

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

there is no fixed price clown
the price will be based on supply and demand. Cool

G

G
Stock Trader

Remember friends, when they introduce shares to CSE, only the original shareholders will have the share in the CDS. For a price to establish there should be sellers as well as buyers.

So, if the existing guys don't want to sell?

Meta Trader

Meta Trader
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

G wrote:Remember friends, when they introduce shares to CSE, only the original shareholders will have the share in the CDS. For a price to establish there should be sellers as well as buyers.

So, if the existing guys don't want to sell?

there will be sellers Very Happy bcoz at the morning these people will place a buy order at the highest level in a one account and the same party will sell at that price . Very Happy Very Happy
then they relies them little by little to our retailers .....

so easy to manipulate isn't it Rolling Eyes Rolling Eyes Rolling Eyes



Last edited by Meta Trader on Sat Feb 26, 2011 8:45 pm; edited 1 time in total

MarketResearch

MarketResearch
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

It is unfair.

Specially small and medium investors are benefited from the IPOs.
At least they are getting 100 or maximum 500 shares at IPO.
Since this thing they(Also we) can not get even 100 or 500.




Rolling Eyes Rolling Eyes Rolling Eyes

kiri

kiri
Manager - Equity Analytics
Manager - Equity Analytics

Meta Trader wrote:there is no fixed price clown
the price will be based on supply and demand. Cool
theoretically ok. but practically it is confuse. when we request in different prices for some shares, company earn more than ipo situation. am i correct.
ex. A request 500X25=12500
B request 500X30=15000
same quantity but company gain extra 2500 from A scratch

xmart

xmart
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

bad practice!!!
they can manipulate shares. new shares will come without fresh money. so, it heavily affect to the market. if this is gonna be happen i quit from market for while.

MarketResearch

MarketResearch
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Friends,

Please find more about this thing and please update us.

Thanks.

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

xmart wrote:bad practice!!!
they can manipulate shares. new shares will come without fresh money. so, it heavily affect to the market. if this is gonna be happen i quit from market for while.
You are correct. We have seen what happend to CDB. It went up from 60 to 160 within an hour. It was purely manipulated.

Fresher


Moderator
Moderator

Going Public by way of introduction is done to allow the existing shareholders to divest from the company and to get a good value for their shares. There will be no new money raised as far as I know.

You cannot really call it unfair.

This can also be done in an IPO. only difference is that new shares are not issued.

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics

Meta Trader wrote:
G wrote:Remember friends, when they introduce shares to CSE, only the original shareholders will have the share in the CDS. For a price to establish there should be sellers as well as buyers.

So, if the existing guys don't want to sell?

there will be sellers Very Happy bcoz at the morning these people will place a buy order at the highest level in a one account and the same party will sell at that price . Very Happy Very Happy
then they relies them little by little to our retailers .....

so easy to manipulate isn't it Rolling Eyes Rolling Eyes Rolling Eyes

Well said... Introduction can lead to a husband buying and wife selling kinda game.. So the share goes up and small investors carried away with it.. Only thing u can go for whatever the number of shares u want..
Unlike IPOs, i think the amt spend on IPO promotion and arrangement is low.. so small cap companies could use this..
My advice is; dont buy big number of shares on margin.. if it goes down, u'll lose much on credit and its not gonna be good..

kiri

kiri
Manager - Equity Analytics
Manager - Equity Analytics

npp wrote:
This can also be done in an IPO. only difference is that new shares are not issued.

Idea mmm now i can understand little. in this scenario there are no new shares current shares only. current share holders can gain profit. but new investors scratch

Fresher


Moderator
Moderator

kiri wrote:
npp wrote:
This can also be done in an IPO. only difference is that new shares are not issued.

Idea mmm now i can understand little. in this scenario there are no new shares current shares only. current share holders can gain profit. but new investors scratch

exactly. this is done for the existing shareholders to exit from the company. it is simply creating an exit route.
A company will not go for an introduction if its shareholders don't want to exit.

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics

npp wrote:
kiri wrote:
npp wrote:
This can also be done in an IPO. only difference is that new shares are not issued.

Idea mmm now i can understand little. in this scenario there are no new shares current shares only. current share holders can gain profit. but new investors scratch

exactly. this is done for the existing shareholders to exit from the company. it is simply creating an exit route.
A company will not go for an introduction if its shareholders don't want to exit.


yep, and when one reads through the prospectus of a few companies that were listed last year they were simply nothing more than creating an exit route for the founders. Yes I am talking about IPOs and not introductions. Not only did the retailers swallow them lock, stock and barrel, they piled into it in the secondary market also. They were heavily hawked at investnow and some are still hawking them here.

DK


Manager - Equity Analytics
Manager - Equity Analytics

I tend to agree with npp, I don't see the problem. As in I don't see why this is any different to a normal trade. How do you decide to buy any other share?

If your buying is triggered by speculation (not to say that it is bad), then I agree, an introduction of shares introduces more variables. Usually we have seen that after an IPO everyone will want to buy and the share price will go up.

If your buying is based on fundamentals, then you exactly know what your price is going to be and what you have valued the share to be.

san1985

san1985
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

smallville wrote:
i think the amt spend on IPO promotion and arrangement is low.. so small cap companies could use this..

i guess it is not that low and this is the most significant part...Somebody correct me if im wrong

econ

econ
Global Moderator

companies go for introduction because they have to spend lot of money on IPO. to issue a IPO you need lot of money. you have to hire investment bank,secretaries ,lawyers etc. . but introduction is not that expensive .
so if company does not need any new capital better way is list as a introduction.

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