Who is responsible for innocent IPO applicants.......?

Normally most newcomers enter to the market through IPOs. But the resent past retail investors experiencing huge losses for their hard earned money. At the very first investment they are disappointing and run away from the market with their awaiting friends who are waiting to enter the CSE. IPO applicants made huge losses due to unfair pricing label of resent past IPOs. Before the IPO those shares have subdivided/split after PP or priced using different strategies. It was discussed in this forum in depth. I think should do some work on this criteria for the coming IPOs in order to protect the existing Investors and attract new investors to the CSE. (Sincee are not experts on pricing of shares,we just apply for IPOs, get some shares, sale with losses and do some robbery to recover the lost. That's what we can do in over level.)

Who ever responsible for the listing should introduce a fair strategy ASAP to protect poor and foolish retailers and to run the market in positive direction.

Most of the IPOs coming when tat company going to slump....? So most IPOs are stupid...so we hav to careful..

If you take the recent overvalued IPOs there were enough information about private placement prices, not only in forums like this, but also in newspapers. The innocent investor should read the prospectus, read the news, learn what's going on before taking the risks. It's unfair to blame anyone but the investors themselves for buying them at overpriced values. Nobody has threaten the people to buy the shares or nobody can force the people not to buy the shares.

insidertrader wrote:If you take the recent overvalued IPOs there were enough information about private placement prices, not only in forums like this, but also in newspapers. The innocent investor should read the prospectus, read the news, learn what's going on before taking the risks. It's unfair to blame anyone but the investors themselves for buying them at overpriced values. Nobody has threaten the people to buy the shares or nobody can force the people not to buy the shares.

All you said is valid and true. But there is valid point in the original post. Most of the guys think IPO's are the safest way to enter the market and do so blindly, because they think that there is no chance of price going down in the secondary market initially. History accounts for that. ( I know its not correct but that's how the majority thinks).
The problem occurs here, after entering blindly when they see share is going down they sell the shares and never think to re enter (most of the guys) and add to that they discourage friends, family everyone around them.
So what is done by these sort of IPO's is discourage people to enter to stock market. This is what I have being raising many times. SEC is destroying the market. Chairperson should answer to these.
Why do they want to assign high P/E to IPO's . Its all right the company wants it but SEC should intervene and do the correction. I do not see any logical fair reason why EXPO allowed to offer at 14 rupees. There are only two reasons I can think of ; SEC does not understand basics of accounting/finance. Or sec officials getting big chunk from EXPO guys..... :evil: :evil:

Regulators duty is to protect the Market. For that they are appointed and paid.

own wrote:Regulators duty is to protect the Market. For that they are appointed and paid.

That's why they enforce T+5. (Don't buy them if you can't pay.) When regulators enforce the controls people blame the regulators.

Although some IPOs failed, some IPOs will shine in the future. Then new IPOs will learn the lesson.

T + 5 not relevant to IPO. Criteria should be there to IPO share pricing.

another example of big companies exploit retailers.
it is SEC duty to introduce pricing criteria for IPOs. IPOs should be PE value of below 10. private placement and IPO price should be same.

Can’t they delay IPO s? Phase out or postpone.

This is not the regulators job. It's your job. Someone in this forum once said the same people who thoroughly check for quality before buying Rs 100 of vegetables don't do the same with shares.

If you don't read the prospectus before applying for an IPO, it's your own fault not the regulator. If you read the prospectus, don't understand it and still apply for the IPO, it's still your own fault not the regulators.

Any company has the right to raise funds through IPOs, Rights and Private Placements. Why should the SEC or CSE deny any company that right and risk getting slapped with a law suite? It's upto you to decide what's a good vegetable and what's a bad vegetable.

tubal wrote:This is not the regulators job. It's your job. Someone in this forum once said the same people who thoroughly check for quality before buying Rs 100 of vegetables don't do the same with shares.

If you don't read the prospectus before applying for an IPO, it's your own fault not the regulator. If you read the prospectus, don't understand it and still apply for the IPO, it's still your own fault not the regulators.

Any company has the right to raise funds through IPOs, Rights and Private Placements. Why should the SEC or CSE deny any company that right and risk getting slapped with a law suite? It's upto you to decide what's a good vegetable and what's a bad vegetable.

I totally Agree with you. The regulator can't impose restrictions on IPO pricing. Its a free Market and the Market will determine whether the pricing is attractive or not. Because unlike manipulation in the secondary Market, at IPO's all the details of the company are shared through the prospects. It's up to the investors to decide whether to invest or not.

tubal wrote:This is not the regulators job. It's your job. Someone in this forum once said the same people who thoroughly check for quality before buying Rs 100 of vegetables don't do the same with shares.

If you don't read the prospectus before applying for an IPO, it's your own fault not the regulator. If you read the prospectus, don't understand it and still apply for the IPO, it's still your own fault not the regulators.

Any company has the right to raise funds through IPOs, Rights and Private Placements. Why should the SEC or CSE deny any company that right and risk getting slapped with a law suite? It's upto you to decide what's a good vegetable and what's a bad vegetable.

Don't you agree current IPO's over priced compared to past IPO's. very high P/E ratios. Are you saying SEC doesn't have any control over IPO pricing. I think they do.
What you are saying is correct. What I am saying because of this over priced IPO's CSE loosing fair amount of people who would like to enter the market.

Now most of the investors know that all IPOs do not go up on the first day.

ipoguru wrote:

tubal wrote:This is not the regulators job. It's your job. Someone in this forum once said the same people who thoroughly check for quality before buying Rs 100 of vegetables don't do the same with shares.

If you don't read the prospectus before applying for an IPO, it's your own fault not the regulator. If you read the prospectus, don't understand it and still apply for the IPO, it's still your own fault not the regulators.

Any company has the right to raise funds through IPOs, Rights and Private Placements. Why should the SEC or CSE deny any company that right and risk getting slapped with a law suite? It's upto you to decide what's a good vegetable and what's a bad vegetable.

Don't you agree current IPO's over priced compared to past IPO's. very high P/E ratios. Are you saying SEC doesn't have any control over IPO pricing. I think they do.
What you are saying is correct. What I am saying because of this over priced IPO's CSE loosing fair amount of people who would like to enter the market.

Over the past two years there have been exactly 2 fairly priced IPOs, ODEL sand SFIN. As Invest-abc says, it's not the regulators jobs to determine how the IPOs are priced. The companies directors have every right to decide at what price they want to sell their shares in the public offering. If they had Stock Exchanges in North Korea or Cuba, their SEC probably decides the IPO pricing for them. But in free markets the directors decide.

The public have every right not to agree with them. What's happening here is that fools have either a) bought into IPOs without reading prospectus b) bought into an IPO knowing it's overpriced, hoping to pass onto a greater fool.

Either way it's a classic example of dumb money at work.

In future investors may be more careful.

own wrote:
Normally most newcomers enter to the market through IPOs. But the resent past retail investors experiencing huge losses for their hard earned money. At the very first investment they are disappointing and run away from the market with their awaiting friends who are waiting to enter the CSE. IPO applicants made huge losses due to unfair pricing label of resent past IPOs. Before the IPO those shares have subdivided/split after PP or priced using different strategies. It was discussed in this forum in depth. I think should do some work on this criteria for the coming IPOs in order to protect the existing Investors and attract new investors to the CSE. (Sincee are not experts on pricing of shares,we just apply for IPOs, get some shares, sale with losses and do some robbery to recover the lost. That's what we can do in over level.)

Who ever responsible for the listing should introduce a fair strategy ASAP to protect poor and foolish retailers and to run the market in positive direction.

guys first of all the name says all.. its a public offering.. the company didnt put a gun to our head and threaten us to subscribe to the offering. Every company is giving us a prospectus with their future plans and audited financials.. so its upto us to subscribe or not.. We cant blame the company when the price doesn't go skyward in first day.. Why are we so addicted to selling on first day??? Why cant we hold it for some time????

Classic Fool...

No Listing
28 Jun, 2011 12:19:06
Sri Lanka airline catering unit listing shelved
June 28, 2011 (LBO) - A plan to take public SriLankan Catering, a wholly owned unit of Sri Lanka's state-run national carrier has been shelved amid a flood of private sector initial offers, Treasury secretary P B Jayasundera said.

If anybody thinks that a particular IPO is overpriced please stay away, that is the only solution.

Setting IPO price is a difficult task even for company directors who's having all information. When the dumb money follows each and every IPO it become fairly straight forward.

By. R.M.B. Senanayake

Recent public issues have not been able to maintain their issue price in the secondary market. Expolanka, the most recent issue which was priced at Rs 14 has fallen to as low as Rs 12 odd. Hydro-Power Free Lanka (HPFL) which was issued at Rs 15 is trading at Rs 13 odd. Free Lanka Capital Holdings which was priced at Rs 5 is now trading at Rs 4/50.The market price of Union Bank issued at Rs 25 is falling close to it. Why is this so?

I think it is because the companies issuing these shares have overpriced them. They have failed to take into account that investors have alternative sources of investment like government bonds which yield over 8% and fixed Deposits which give 10-11%.

http://www.news360.lk/featured/the-over-pricing-of-new-public-issues

milanka wrote:By. R.M.B. Senanayake

Recent public issues have not been able to maintain their issue price in the secondary market. Expolanka, the most recent issue which was priced at Rs 14 has fallen to as low as Rs 12 odd. Hydro-Power Free Lanka (HPFL) which was issued at Rs 15 is trading at Rs 13 odd. Free Lanka Capital Holdings which was priced at Rs 5 is now trading at Rs 4/50.The market price of Union Bank issued at Rs 25 is falling close to it. Why is this so?

I think it is because the companies issuing these shares have overpriced them. They have failed to take into account that investors have alternative sources of investment like government bonds which yield over 8% and fixed Deposits which give 10-11%.

http://www.news360.lk/featured/the-over-pricing-of-new-public-issues

Well T bill yield is only 7.2 while bonds do have a yield of 8.3% However the bank deposit rates is much much less. It's only about 6.3% . Ours is one of the few countries in the world where the risk free rate is higher than the bank deposit rates! The GM of a stock broking firm should at least have an idea about interest rates. In a previous article he wrote about short selling, blissfully unaware that's it's not implemented yet!

references:
http://www.cbsl.gov.lk/htm/english/_cei/ir/i_4.asp
http://www.cbsl.gov.lk/htm/english/_cei/ir/i_3.asp

tubal wrote:

milanka wrote:By. R.M.B. Senanayake

Recent public issues have not been able to maintain their issue price in the secondary market. Expolanka, the most recent issue which was priced at Rs 14 has fallen to as low as Rs 12 odd. Hydro-Power Free Lanka (HPFL) which was issued at Rs 15 is trading at Rs 13 odd. Free Lanka Capital Holdings which was priced at Rs 5 is now trading at Rs 4/50.The market price of Union Bank issued at Rs 25 is falling close to it. Why is this so?

I think it is because the companies issuing these shares have overpriced them. They have failed to take into account that investors have alternative sources of investment like government bonds which yield over 8% and fixed Deposits which give 10-11%.

http://www.news360.lk/featured/the-over-pricing-of-new-public-issues

Well T bill yield is only 7.2 while bonds do have a yield of 8.3% However the bank deposit rates is much much less. It's only about 6.3% . Ours is one of the few countries in the world where the risk free rate is higher than the bank deposit rates! The GM of a stock broking firm should at least have an idea about interest rates. In a previous article he wrote about short selling, blissfully unaware that's it's not implemented yet!

references:
http://www.cbsl.gov.lk/htm/english/_cei/ir/i_4.asp
http://www.cbsl.gov.lk/htm/english/_cei/ir/i_3.asp

As usual u r spot on tubal, the central bank had only one target, they wanted bring the interest rates down to single digit that's it... Always only look at one side of a action.. that is pure sri lankan policy making