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Where would CPF money go if it is nominated to a bankrupt? When Madam Lim Lye Kiang sought to claim the $102,000 from CPF which her late sister had left her, she would never have expected that the CPF Board transferred the money to the OA (Official Assignee) to...

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Why you should not buy IPOs As Sheng Siong is launching its IPO next month, I expected a few calls as whenever an IPO is launching. And if you are my client, you know my answer. I decide to write this article so everybody can benefit...

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Questions to ask your Financial Adviser Every Sunday morning when I flip open the newspapers, I always see articles or advertisements regarding "Financial Advisers". Nowadays, just like the once prestigious word "Banker", which is misused in...

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Revision to Nomination of Insurance Nominees Regulation With the onset of the Mental Capacity Act ("MCA") coming into effect on 1st March 2010, the Insurance (Nomination of Beneficiaries) Regulations 2009 ("the Regulations") will be amended to effect 2 changes: The...

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The ABCs of the Financial Advisers Act The title, Financial Adviser, is always mis-used in the industry and misunderstood by the consumers. On 10 October 2002, the Financial Advisers Act came into effect and all financial institutions are...

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Should I Invest in Sheng Siong IPO?

Category : Stocks

Today I see a surge of visit to one of my blog entries last month, Sheng Siong seeks up to S$141m in IPO. It is obviously because Sheng Siong made the headlines in today’s Straits Times, “Sheng Siong dangles dividend as carrot in IPO”.

I always caution investors against investing in IPOs not due to the fundamentals of any new IPO company, but because I believe the IPOs in general is oversold and investors often undermine the risks that they are taking.

After my previous blogs, I received an email from a Teenager asking me for opinions about Sheng Siong IPO.Here is what he wrote:

“I would like to know from you whether this a good buy or bad buy. I am actually a teenager and this is my first time buying stocks.”

I was disturbed by the fact that the buyers for the IPO could be a student or a retiree who may not understand what they are buying into.

Anyway, the “indicative price range was S$0.36 to S$0.40 apiece”. Based on today’s news, Sheng Siong will offer 351.5 million shares only at S$0.33 apiece at the launch of the IPO. In my opinion, it shows the market sentiment is bad and the interest in the shares is relatively low. If your intention is hit the jackpot,  you really should think about it twice.

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