Friday, June 13, 2008

Steer clear of IPOs for now

I advise my readers not to ballot for IPOs at current market sentiments. It is actually difficult to invest on IPOs by looking at their prospectus. Many have painted beautiful pictures to attract potential investors.
If we were to analyse the IPOs launched last year, some have sinked more than 50%. Example: Z-Obee, China New Town, China Oil Field (down about 40%). Even REITS of "defensive" nature were not spared, like Saizen, down 30%.
The probability of making money from trading IPOs is less than 40%.
If you want to "bet" on IPOs, perhaps Singapore pools will offer better odds!

2 comments:

Anonymous said...

In the current market, IPOs are definitely dead. And look at the slew of companies on offer. And also wondering if the take up rate is low, will the underwriters of the share issue meaning the merchant banks take a hit by having to take up the balance shares and probably losing money on it later on? The bottom line of our investment in these blue chip bank shares would also be affected?

I like your blog. Keep up the good work.

Sgbluechip said...

Thanks!