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1. |
What is IPO?
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IPO refers to the first public distribution
of stocks from a company that have not been publicly traded
before. |
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2. |
Why do companies go public?
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Enterprises can raise new capital for expansion
through IPO. It can also raise the publicity of enterprises. |
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3. |
How do companies go public?
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The Listing Committee of the Stock Exchange
of Hong Kong (SEHK) must approve all proposed listing
before it could go public. Two essential parties for a
listing are sponsors and underwriters. Sponsors are responsible
for handling the application procedures and mainly deal
with SEHK. Except for some special cases, most of the
issuers in an IPO would need underwriters to buy all shares
not subscribed by the public.
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4. |
How do I get started buying
IPO?
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You should fill in the application forms
that are available in the places specified.
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5. |
How do I know which IPOs
are available and when?
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According to listing rule of SEHK, all
enterprises must broadcast to the public for their proposed
listing. While main board issuers need to announce in
both an English and a Chinese newspaper, GEM board issuers
can announce via the Web page owned by GEM Board of SEHK.
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6. |
How do individual investors
get IPO shares?
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Such information is given in each IPO's
application form and prospectus. |
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7. |
How can I subscribe for
IPO online?
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You would need a trading account with SHK
Online Ltd. for IPO subscription. For existing
customer, simply login and follow the IPO subscription
procedures. |
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8. |
What is the method of IPO
payment?
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Payment methods for IPO and e-IPO are specified
in the application forms. |
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9. |
How do I get the results
of subscription?
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For those clients who have applied the
IPOs in their own name, subscription results can usually
be found in newspapers. If the IPO subscription is applied
through us, you can check your allotment result by viewing
your trading account on or after the allotment date.
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10. |
How to evaluate IPO shares?
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You can compare the prospects and multiples
like P/E ratio of peers in the same industry.
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11. |
What is Primary and Secondary
Market?
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Primary market is the market in which newly
issued securities are offered for sale. Secondary market
is the market where existing securities are traded between
investors.
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12. |
What is meant by Primary
and Secondary Offering?
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Primary Offering refers to IPO. Secondary
Offering refers to the public distribution of stocks from
a company whose shares have already been listed.
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13. |
What is book building?
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Book building is a process usually occurred
in placing. All underwriters submit the number of shares
and respective prices that they are willing to underwrite.
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14. |
What is syndicate?
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Syndicate refers to the underwriters who
participate in the same IPO. |
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15. |
What is prospectus?
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Prospectus is a document showing the formation
of and intent to issue shares. It is the legal document
stating the purpose of the securities issue, describing
in detail the primary business of the issuer, the issuer's
financial condition and all matters as well as requirements
relating to the IPO. |
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16. |
What is "Red Herring"?
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Red Herring is a customary statement, printed
in red, on the first page of a prospectus. It is not an
offer to sell, but contains the required public disclosures.
It is also called preliminary prospectus. The notice is
printed in red on the first page of the preliminary prospectus
and on the face of the preliminary offering circular.
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17. |
What are underwriters?
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Underwriters are those who undertake to
buy all remaining shares of an issuer when the IPO is
not fully subscribed by the public.
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18. |
What is "cooling-off"period?
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"Cooling-off"period, which is
also known as "black-out period", refers to
the period during which no brokers can issue research
reports on the proposed listing enterprise.
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19. |
What are New Issue and Additional
Issue?
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New issue is the issuance of new shares
at the offer price in an IPO. Additional issue is the
issuance in addition to the original proposed shares,
which often occurs when there is over-allotment.
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20. |
Is there more than one type
of offering?
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There are many types of offering including
public offer, placing, introduction and so forth.
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21. |
What is public offering
price?
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Public offering price is the price per
offer share, exclusive of brokerage cost, the SEHK trading
fee and the SFC transaction levy at which the offer shares
are to be offered pursuant to the share offer. |
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