INSIDER
the price is right
Looking for a low-risk short-term investment opportunity? Boon Tiong Tan reveals how to make some easy money in the Year of the Ox
Photos courtesy of stock.adobe.com
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hat should we do with money that’s sitting in the bank earning almost nothing? Buy bonds? The coupons are very low and when interest rates are heading higher, bond prices drop. Buy stocks? The stock market could be volatile moving into the Year of the Ox. Pop an IPO? Yes.
more than a million applicants. The top eight performing IPOs last year made investors between HK$8,000 and HK$18,000 richer, and that was when they were allotted only the minimum number of shares. Those who were allotted multiples of the minimum shares were literally laughing all the way to the bank.
Applying for a red-hot IPO (Initial Public Offering) and selling the shares on its first day of listing is a quick and easy way to make some money at low risk. Many Hong Kong investors are already doing so, making hundreds to tens of thousands of dollars each time. In the biggest ever but aborted IPO in 2020, Ant Group attracted
In extreme cases, the so-called ‘IPO pop’ on the first day of trading can more than double your money. Eleven out of 145 IPOs did just that last year.
What is an IPO? When business owners want to raise money to expand, one way
February 2021 www.arounddb.com
to do so is to sell the company to the public through an IPO. It is a process that takes a company out of private hands and into the hands of public shareholders. There are over a hundred IPOs in Hong Kong each year. Some rise above the IPO prices, some sink below. To be safe and efficient, you should only go for large, reputable companies that will almost certainly give you quick and healthy profits on the first day. There are probably around 10 such IPOs each year. JD Health, Blue Moon Group and NongFu Spring are great examples from 2020. It’s not difficult to identify the good bets, they are splashed all over the internet, on TV and in the
