Wednesday, February 27, 2013

Largest IPO in 2 Years Goes Live on 7 March - Mapletree Greater China Commercial Trust

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Largest IPO in 2 Years Goes Live on 7 March

And so, just a quick update about the Mapletree Greater China Commercial Trust that has reignited the attention onto the SG IPO scene.

  • S$1.68 billion to be raised in largest REIT IPO
    • Last year SGX raised a total of S$4.5 billion which was somewhat a dampener compared to the $9.4 billion raised in 2011. 
  • Offer is confirmed to be S$0.93/share
    • Highest price of the previously indicated indicative price range of S$0.88 to S$0.93
  • Retail offer shares ballot application start on Feb 28
    • (for green investors/IPO-applicants, do check out the "Guide to IPO Investing" on this blog regarding the SG IPO application procedures)
    • (do also check out "SG IPO Statistics" on this blog for a statistical breakdown of IPOs since 2012)
  • Listing date March 7
  • Cornerstone investors
    • Temasek Holdings
    • Morgan Stanley
    • Norges Bank Investment Management
    • AIA Group subsidiaries
    • CBRE Group
    • Henderson Global Investors


Quick Conclusion
As mentioned before, the upper pricing of this IPO is vastly within expectations given the wide search for yield even in this period. With such a brand name and big boys backing this IPO, it is also not surprising that the institutional demand ensured that the IPO be priced at the higher end of the spectrum. 
What this means for us investors is 
  • the general assurance of a good fundamentally strong stock. take general with a pinch of salt after what ratings agencies did to our financial system leading to the sub-prime meltdown.
  • while knowing that we, as retail investors, are getting it at a much higher premium than did the first cornerstone investors and even the institutions at the placement tranche
All in all, it should impress that if you are fine with the extra premium through the IPO, then this IPO has few fundamental reasons to be avoided. If not, you may want to observe its market equilibrium first before deciding to buy in. My feel is that it is not too late.
I am also skeptically wondering why the IPO is still going ahead at such a suddenly volatile period for the markets. Just my thoughts.

Anyway, I have previously written a more elaborate analysis of the MCGCT IPO that you can find here. Do read it before you make your decision!
Happy and healthy trading people.


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