Know about IPO’s Basics and Strategies
IPO or Initial Public Offerings stand for the alteration point of companies from a private category to a publicly held status. Thus, IPO’s corresponds to one of the most intimately pragmatic events in the stock market since they mark the commencement of a new trading opportunity. Since every business starts as a small enterprise, the new player on the stock market issues only a few stocks, which results in a relatively small number of stockholders.
How Company Offer Issues Publicly?
The first step a company should be taken by the company become publicly traded is to being registered with the Securities and Exchange Commission (the SEC). After getting registered with SEC, public offering is prepared and which should include a company's prospectus and other legal documents that are required by the SEC.
Each capable investor has the right to receive a company's prospectus. The company’s prospectus corresponds to a legal and secretarial document, which elucidates in detail the situation in the company, including information about the senior staff, majority stockowners and the potential risks the company faces.
Setting the Price of the Stock
After the company has registered with the SEC and met its other requirements, the company should contact with an investment bank(s) and sign a contract for the distribution of the shares the company is willing and able to sell. The other contractors may agree to underwrite the distribution of shares. After this both parties agree on an initial price at which the stocks to be opened for sale. This price depends on the earnings or potential earnings of the company as well as its growth. As well as, deliberation about the market's willingness to accept the agreed price should be made.
After the contracts have been signed and the price considerations made, the underwriters are ready to make the first offers to major broker clients. In return, they offer these bundles of stocks to their big retail and institutional clients. Along this chain, every participant gets his/her reward.
Since the stock goes through several people until it reaches the final investors, its final price may be well above the initially set price. This is especially true if the company that issues the stock enjoys the status of being a hot deal.
As you can see individual investors suffer from such a system since at the time the stock reaches their hands, its price is significantly above the IPO level.
Know how to make Money from IPO’s?
You can make money by using IPOs in two ways:
Buy the IPO early and sell it early
The way from which you can be benefited from an IPO is buy a stock as promptly as possible and hope that it will quickly increase its price. After this happens, sell the stock and enjoy the profits. However, this strategy is not really investing in itself. On the other hand, if you are not too risk loath and have the time to make the necessary researches and market observations, maybe this risky strategy for making money is for you.
Set up a target price
The second strategy consists of the establishment of a target price. Once the stock reaches this target price, you should see whether you could purchase the stock at this price. There are cases in which the price may go up and down. Therefore, you should apply the necessary patience and wait for the stock's price to come to a reasonable level.
Finally yet importantly, do not be too dejected that it is impossible to make money from IPO’s. If you apply the necessary discipline and make the needed researches, you may end up with good profits. Have in mind that trading with IPO’s has its risks so you should determine how far you could get.
Wednesday, March 17, 2010
Friday, December 18, 2009
European Stocks Close Lower
European shares on Friday failed to hold early gains, closing lower on concerns over the need for fund raising by banks.
After early gains of as much as 1% in the morning, the pan-European Dow Jones Stoxx 600 index lost 0.4% to 246.29, with banks losing ground for a second straight session.
As with Thursday's move, capital concerns dragged on the financial sector.
French bank Credit Agricole dropped 7.1%. It was downgraded to neutral from buy by Bank of America Merrill Lynch, which said tougher bank capital rules, proposed on Thursday, would create challenges.
The new capital rules, issued by the Basel Committee on Banking Supervision, have a target implementation date of the end of 2012, but the committee said it is mindful of the current economic challenges and would take that into account when finalizing the rules and dates of implementation.
In addition to the proposed capital rules, the European Central Bank put the potential further write-downs on assets for the euro-area banking sector through the end of 2010 at €187 billion ($269 billion) in its financial stability review out Friday.
The Bank of England also expressed caution whether banner bank earnings in 2009 could be repeated in the coming year.
By region, the U.K. FTSE 100 index dropped 0.4% to 5,196.81 and the German DAX index slipped 0.2% to 5,831.21.
The French CAC-40 index declined 1% to 3,794.44 as the losses from Credit Agricole weighed.
On the economic front, the Ifo Institute's closely watched indicator of German business sentiment rose to 94.7 in December, slightly above economist expectations for a reading of 94.5. Last month, the reading was 93.9.
"The Ifo survey supports expectations of continued solid growth in the near term," noted economists at Societe Generale.
Gainers on Friday included Irish low-cost airline Ryanair, which climbed 5.8% after it terminated negotiations with Boeing for an order of up to 200 new aircraft and promised to return cash to shareholders. Boeing lost 2% in U.S. afternoon trading.
Iliad shares rose 3.7% after the firm was awarded the fourth 3G mobile license in France.
Shares of Cimemtos de Portugal, known as Cimpor, soared 16% to 6.34 euros in Lisbon following a takeover bid. Brazil's Co. Siderurgica Nacional said that it has bid 5.75 euros a share, or 3.86 billion euros in total, to buy the Portuguese cement firm.
Teixeira Duarte and Lafarge between them hold 40% of Cimpor and Teixeira shares jumped 15.5% in Lisbon while Lafarge fell 1.6% in Paris.
Independent News & Media shares surged 20.5%, also on takeover news. It is in exclusive - but non-binding - talks with London Evening Standard newspaper owner Alexander Lebedev to sell The Independent and Independent on Sunday newspapers.
Shares in Spyker Cars dropped 21.9% after General Motors said talks over the sale of the Saab brand to Spyker had collapsed. GM is going to wind down Saab's operations.
After early gains of as much as 1% in the morning, the pan-European Dow Jones Stoxx 600 index lost 0.4% to 246.29, with banks losing ground for a second straight session.
As with Thursday's move, capital concerns dragged on the financial sector.
French bank Credit Agricole dropped 7.1%. It was downgraded to neutral from buy by Bank of America Merrill Lynch, which said tougher bank capital rules, proposed on Thursday, would create challenges.
The new capital rules, issued by the Basel Committee on Banking Supervision, have a target implementation date of the end of 2012, but the committee said it is mindful of the current economic challenges and would take that into account when finalizing the rules and dates of implementation.
In addition to the proposed capital rules, the European Central Bank put the potential further write-downs on assets for the euro-area banking sector through the end of 2010 at €187 billion ($269 billion) in its financial stability review out Friday.
The Bank of England also expressed caution whether banner bank earnings in 2009 could be repeated in the coming year.
By region, the U.K. FTSE 100 index dropped 0.4% to 5,196.81 and the German DAX index slipped 0.2% to 5,831.21.
The French CAC-40 index declined 1% to 3,794.44 as the losses from Credit Agricole weighed.
On the economic front, the Ifo Institute's closely watched indicator of German business sentiment rose to 94.7 in December, slightly above economist expectations for a reading of 94.5. Last month, the reading was 93.9.
"The Ifo survey supports expectations of continued solid growth in the near term," noted economists at Societe Generale.
Gainers on Friday included Irish low-cost airline Ryanair, which climbed 5.8% after it terminated negotiations with Boeing for an order of up to 200 new aircraft and promised to return cash to shareholders. Boeing lost 2% in U.S. afternoon trading.
Iliad shares rose 3.7% after the firm was awarded the fourth 3G mobile license in France.
Shares of Cimemtos de Portugal, known as Cimpor, soared 16% to 6.34 euros in Lisbon following a takeover bid. Brazil's Co. Siderurgica Nacional said that it has bid 5.75 euros a share, or 3.86 billion euros in total, to buy the Portuguese cement firm.
Teixeira Duarte and Lafarge between them hold 40% of Cimpor and Teixeira shares jumped 15.5% in Lisbon while Lafarge fell 1.6% in Paris.
Independent News & Media shares surged 20.5%, also on takeover news. It is in exclusive - but non-binding - talks with London Evening Standard newspaper owner Alexander Lebedev to sell The Independent and Independent on Sunday newspapers.
Shares in Spyker Cars dropped 21.9% after General Motors said talks over the sale of the Saab brand to Spyker had collapsed. GM is going to wind down Saab's operations.
NYSE Liffe's Bclear has record year with over 250 million contracts registered in 2009
Amsterdam, Brussels, Lisbon, London, Paris, Wednesday 16 December – Total volume in equity derivatives futures and options registered through NYSE Liffe’s Bclear OTC wholesale service has just passed 250 million, setting a new record for the fourth consecutive year.
Bclear provides a simple and cost-effective way to register and process wholesale derivatives trades through NYSE Liffe to clearing at NYSE Liffe Clearing. This reduces the counterparty, credit, legal and operational risks often associated with OTC trades. Volumes processed through Bclear in the year-to-date are 40% higher than in the same period of 2008.
Having initially launched in October 2005 as an equity derivatives platform covering 300 underlyings from 16 different countries, Bclear today is a cross-asset class platform covering over 1,000 underlyings from 22 countries. In February NYSE Liffe further extended its offering with the launch of thirteen MSCI index futures and in March launched a range of soft commodity products.
Bclear’s success is due, in part, to the broad adoption by both the buy-side community and member firms benefiting from the broad range of underlyings and flexibility available on the service.
Ade Cordell, Director of OTC Services at NYSE Liffe said: “Our Bclear service continues to offer value and flexibility to our customers in these testing times. Our index derivative products and single stock futures franchise propelled the volume growth on Bclear this year. 2010 will bring a further broadening of underlyings and products offered on the service.”
Garry Jones, Group Executive Vice President and Head of Global Derivatives at NYSE Euronext said: “We are proud to reach this new milestone and my colleagues and I thank our customers and wish them well for the coming year.”
Bclear provides a simple and cost-effective way to register and process wholesale derivatives trades through NYSE Liffe to clearing at NYSE Liffe Clearing. This reduces the counterparty, credit, legal and operational risks often associated with OTC trades. Volumes processed through Bclear in the year-to-date are 40% higher than in the same period of 2008.
Having initially launched in October 2005 as an equity derivatives platform covering 300 underlyings from 16 different countries, Bclear today is a cross-asset class platform covering over 1,000 underlyings from 22 countries. In February NYSE Liffe further extended its offering with the launch of thirteen MSCI index futures and in March launched a range of soft commodity products.
Bclear’s success is due, in part, to the broad adoption by both the buy-side community and member firms benefiting from the broad range of underlyings and flexibility available on the service.
Ade Cordell, Director of OTC Services at NYSE Liffe said: “Our Bclear service continues to offer value and flexibility to our customers in these testing times. Our index derivative products and single stock futures franchise propelled the volume growth on Bclear this year. 2010 will bring a further broadening of underlyings and products offered on the service.”
Garry Jones, Group Executive Vice President and Head of Global Derivatives at NYSE Euronext said: “We are proud to reach this new milestone and my colleagues and I thank our customers and wish them well for the coming year.”
Monday, November 23, 2009
US STOCKS SNAPSHOT-Wall St rises on data, resource shares
NEW YORK, Nov 23 - U.S. stocks extended gains on Monday, with Nasdaq increasing 2 percent, after data showed sales of previously owned homes rose to the highest in more than 2-1/2 years, while a rally in commodities boosted resource shares.
EU Approves EUR100 Million Aid Package For German Farmers
BRUSSELS -(Dow Jones)- The European Comission Monday temporarily approved a plan by Germany to grant up to EUR15,000 for each farmer to help the sector weather the economic crisis.
The aid, amounting to EUR100 million, will be available through the end of 2010.
Falling farm prices have deprived German farmers of EUR6 billion in income, the commission said, citing data provided by the German government.
The aid, amounting to EUR100 million, will be available through the end of 2010.
Falling farm prices have deprived German farmers of EUR6 billion in income, the commission said, citing data provided by the German government.
Wednesday, October 28, 2009
European, US stocks fall after housing data drop
LONDON: European and US stocks slid Wednesday after data showed the number of new home sales in the world's largest economy unexpectedly dropped last month, stoking fears about the pace of a potential economic recovery.
Britain's FTSE 100 closed down 2.3 percent at 5,080.42, Germany's DAX shed 2.5 percent to 5,496.27 and France's CAC 40 lost 2.1 percent at 3,663.78.
In midday trading in New York, the Dow Jones industrial average index slipped 0.6 percent to 9,827 and the Standard & Poor's 500 index was 1.3 percent lower at 1,049.84.
Major Asian markets fell by about 1.5 percent or more following weakness in the US on Tuesday after a disappointing report on consumer confidence in the world's largest economy.
A US government report Wednesday showed sales of new homes dropped in September as the effects of a soon-to-expire tax credit for first-time owners started to wane. Sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists had expected a pace of 440,000. It was the first decline since March.
Meanwhile, another US government report that showed durable goods orders rose in line with expectations in September had little effect on trading. Orders to factories for items that are expected to last at least three years, like autos, computers and aircraft, rose 1 percent, matching economists' expectations.
European markets were weighed down by earnings reports from companies including German business software maker SAP AG, which cut its sales forecast. SAP said third-quarter net income rose 12 percent, but a negative outlook sent its shares down 7.7 percent. The company said it expects software and related service revenues to decline by about 6 percent to 8 percent for the full year. Earlier this year, the company had suggested a drop of between 4 percent and 6 percent.
Banking shares declined, including Banco Santander, whose third-quarter profits remained flat, with increased loan losses weighing on the bottom line despite improving business in Britain. Shares in Spain's largest bank fell 3.4 percent.
ArcelorMittal SA, the world's largest steel maker, posted a $903 million profit in the third quarter, its first after three consecutive quarterly losses. The profit was still 76 percent below year-earlier levels, and its shares sank around 5 percent in Amsterdam.
``For the moment financial markets have clearly stagnated, with a realization hitting home that all the warnings of a return to growth being a long and painfully slow process are not just hot air,'' said David Jones, chief market strategist at IG Index.
Asia's losses followed a choppy session on Wall Street Tuesday, where an unexpected drop in consumer confidence gave investors few reasons to venture further into a market that's run massively higher in the last eight months.
The news was the latest evidence that US shoppers, their budgets tightened by the economic crisis and rising unemployment, aren't likely to return to their spendthrift ways anytime soon. It was all the more unsettling in Asia, coming ahead of the vital Christmas holiday season, when major export companies rely heavily on Americans to increase their spending on electronics, toys and other goods.
``The figure sparked worries that US consumer spending in the crucial Christmas season will be stagnant. Investors are now bracing for very weak retail sales in the upcoming season,'' said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd. in Tokyo.
In Japan, the benchmark Nikkei 225 index lost 1.4 percent to 10,075.055. Hong Kong's main index retreated 1.8 percent to 21,761.58.
South Korea's Kospi dived 2.4 percent, leading the declines in Asia. Australia's market fell 1.4 percent, Taiwan's market lost 1.6 percent and India's Sensex benchmark fell 0.6 percent.
China's Shanghai index recouped its losses to close up 0.3 percent,
The mixed signals about the scale of recovery in the US economy weighed on oil prices, with benchmark crude for December delivery lower by $2.07 at $77.48 a barrel in European trade. The contract rose 87 cents to settle at $79.55 on Tuesday.
Britain's FTSE 100 closed down 2.3 percent at 5,080.42, Germany's DAX shed 2.5 percent to 5,496.27 and France's CAC 40 lost 2.1 percent at 3,663.78.
In midday trading in New York, the Dow Jones industrial average index slipped 0.6 percent to 9,827 and the Standard & Poor's 500 index was 1.3 percent lower at 1,049.84.
Major Asian markets fell by about 1.5 percent or more following weakness in the US on Tuesday after a disappointing report on consumer confidence in the world's largest economy.
A US government report Wednesday showed sales of new homes dropped in September as the effects of a soon-to-expire tax credit for first-time owners started to wane. Sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists had expected a pace of 440,000. It was the first decline since March.
Meanwhile, another US government report that showed durable goods orders rose in line with expectations in September had little effect on trading. Orders to factories for items that are expected to last at least three years, like autos, computers and aircraft, rose 1 percent, matching economists' expectations.
European markets were weighed down by earnings reports from companies including German business software maker SAP AG, which cut its sales forecast. SAP said third-quarter net income rose 12 percent, but a negative outlook sent its shares down 7.7 percent. The company said it expects software and related service revenues to decline by about 6 percent to 8 percent for the full year. Earlier this year, the company had suggested a drop of between 4 percent and 6 percent.
Banking shares declined, including Banco Santander, whose third-quarter profits remained flat, with increased loan losses weighing on the bottom line despite improving business in Britain. Shares in Spain's largest bank fell 3.4 percent.
ArcelorMittal SA, the world's largest steel maker, posted a $903 million profit in the third quarter, its first after three consecutive quarterly losses. The profit was still 76 percent below year-earlier levels, and its shares sank around 5 percent in Amsterdam.
``For the moment financial markets have clearly stagnated, with a realization hitting home that all the warnings of a return to growth being a long and painfully slow process are not just hot air,'' said David Jones, chief market strategist at IG Index.
Asia's losses followed a choppy session on Wall Street Tuesday, where an unexpected drop in consumer confidence gave investors few reasons to venture further into a market that's run massively higher in the last eight months.
The news was the latest evidence that US shoppers, their budgets tightened by the economic crisis and rising unemployment, aren't likely to return to their spendthrift ways anytime soon. It was all the more unsettling in Asia, coming ahead of the vital Christmas holiday season, when major export companies rely heavily on Americans to increase their spending on electronics, toys and other goods.
``The figure sparked worries that US consumer spending in the crucial Christmas season will be stagnant. Investors are now bracing for very weak retail sales in the upcoming season,'' said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd. in Tokyo.
In Japan, the benchmark Nikkei 225 index lost 1.4 percent to 10,075.055. Hong Kong's main index retreated 1.8 percent to 21,761.58.
South Korea's Kospi dived 2.4 percent, leading the declines in Asia. Australia's market fell 1.4 percent, Taiwan's market lost 1.6 percent and India's Sensex benchmark fell 0.6 percent.
China's Shanghai index recouped its losses to close up 0.3 percent,
The mixed signals about the scale of recovery in the US economy weighed on oil prices, with benchmark crude for December delivery lower by $2.07 at $77.48 a barrel in European trade. The contract rose 87 cents to settle at $79.55 on Tuesday.
Sensex ends in red; Maruti, Tata Steel down
MUMBAI: Market ended volatile session on a lower note as traders squared off positions ahead of October F&O series expiry.
Bombay Stock Exchange’s Sensex ended at 16282.79, down 70.61 points or 0.43 per cent. The index touched a low of 16144.17 and high of 16411.14.
National Stock Exchange’s Nifty ended at 4830.50, down 16.20 points or 0.33 per cent. The broader index hit a low of 4784.10 and high of 4867.
BSE Midcap Index was up 0.25 per cent and BSE Smallcap Index moved 0.33 per cent lower.
Amongst the sectoral indices, BSE Bankex declined 1.54 per cent, BSE Auto Index fell 1 per cent and BSE Power Index slipped 0.85 per cent.
BSE Realty Index moved 0.93 per cent higher and BSE Oil&gas Index was up 0.71 per cent.
Biggest Sensex gainers were Bharti Airtel (3.39%), Wipro (3.29%), Reliance Industries (2.44%), Tata Motors (2.42%) and Larsen &Toubro (1.99%).
Losers were Maruti Suzuki (-4.38%), Tata Steel (-3.63%), HDFC (-3.44%), ICICI Bank (-3.4%) and HDFC Bank (-2.8%).
Market breadth on BSE remained negative with 1603 declines outnumbering 1076 advances.
Bombay Stock Exchange’s Sensex ended at 16282.79, down 70.61 points or 0.43 per cent. The index touched a low of 16144.17 and high of 16411.14.
National Stock Exchange’s Nifty ended at 4830.50, down 16.20 points or 0.33 per cent. The broader index hit a low of 4784.10 and high of 4867.
BSE Midcap Index was up 0.25 per cent and BSE Smallcap Index moved 0.33 per cent lower.
Amongst the sectoral indices, BSE Bankex declined 1.54 per cent, BSE Auto Index fell 1 per cent and BSE Power Index slipped 0.85 per cent.
BSE Realty Index moved 0.93 per cent higher and BSE Oil&gas Index was up 0.71 per cent.
Biggest Sensex gainers were Bharti Airtel (3.39%), Wipro (3.29%), Reliance Industries (2.44%), Tata Motors (2.42%) and Larsen &Toubro (1.99%).
Losers were Maruti Suzuki (-4.38%), Tata Steel (-3.63%), HDFC (-3.44%), ICICI Bank (-3.4%) and HDFC Bank (-2.8%).
Market breadth on BSE remained negative with 1603 declines outnumbering 1076 advances.
Subscribe to:
Comments (Atom)
