How to Subscribe to IPO

Recent hot topics around the stock market are how to subscribe to an IPO (Initial Public Offering). We will be sharing how to subscribe to IPO shares through online banking. 

Disclaimer: The information and print screens in this post are for educational purposes only. Shall not be construed as an offer, invitation or solicitation to buy or sell any securities. We do not associate with any banks, financial institutions, or any IPO companies. Investing in the equity market or IPOs incur risk. Investors should read and understand all IPO’s related documents before investing.

Initial Public Offering

Initial public offering is a private company getting listed in the stock market to raise more funds from the public for business expansion or other reasons. Getting listed in the stock market is every businessman’s dream. Other than raising more funds for their business, getting listed will definitely help to increase your branding to your customers, suppliers' trust, and attract more talents.  

However, we do see some companies get listed for the sake of branding and without proper planning on how to manage their stock price. Which makes many retail investors suffer from losses due to not understanding stock price & business performance management are different. 

You may watch our video below to find out more why some companies with good fundamentals but stock prices won’t grow at the video below:


https://youtu.be/wtGsK8PSCXU

How to Subscribe to IPO

Step 1: Have a CDS Account/ Trading Account.

Every retail investor who wishes to invest or trade in the stock market must register a trading account with local brokers. You need to have a CDS account in order to subscribe to IPO shares. If your subscription is successful, the shares will transfer to the CDS account you provide. 

Take note: Local brokers are not necessary to be banks. This is a misunderstanding by the public that only banks offer trading account openings. Not all banks have broker licenses and not all brokers are attached to banks. Usually, banks with broker service are just subsidiaries of a bank or a sister company model. 

Broker licenses are governed by separate bodies such as the Securities Commission and Exchange (Bursa Malaysia). At some point, the central bank (Bank Negara) might govern certain areas too, such as the Anti-Money Laundering act. 

For trading account opening, you may look at the link below for account opening and you must be 18 years or older. Do read the Terms and Conditions before opening an account. 

Charges for account opening: RM10 (charged by Bursa Malaysia)

Step 2: Subscribe through online banking

Disclaimer: we don’t represent any banks or financial institutions. For more details or encounter any trouble in subscribing to an IPO, please contact the respective banks. Shall the IPO subscriptions be on a balloting basis, there might be chances that your subscription may not be successful.

With recent years of improvement by Bursa Malaysia, investors can now subscribe to IPO shares via online banking. However, some IPOs may not be available on some online banking sites. Do check the prospectus of the IPO company for ways to subscribe. 

1 of the widely used online banking to subscribe IPOs are Maybank2u & Cimbclicks. We will show the examples of where to click to subscribe in both of these online banking. 

Maybank2u

Screenshot 1

Screenshot 2

  1. Login to your Maybank2u and click on “APPLY” at the top right of the screen.
  2. Click on “investment” as shown in screenshot 1 above.
  3. Look for “eIPO” and click on “APPLY NOW”
  4. Select the account that you wish to transfer the funds to subscribe to. 
  5. Enter your CDS account number.
  6. Key in all the information required.
  7. Select the IPO stock you wish to subscribe to & enter the number of units.
  8. TAKE NOTE: Don’t forget to read the prospectus & declaration before you subscribe for IPO and make sure you understand and the investment you are making is suitable for your risk. 
  9. Once you have read, you may check the “I have read and agree with the documents above” 
  10. Click submit.

CIMBCLICKS

  1. Login to your Cimbclicks online banking, look for “apply & invest” at the left side bar.
  2. Scroll down until you see “eIPO”.

  1. Select the IPO you wish to subscribe to and remember to read the prospectus and understand the investment you are making.
  2. If you are clear and understand the documents you have read. Click “Apply”.

  1. Read and understand the declaration, make sure you fulfilled all of the points under the declaration. 
  2. If you accept the terms and conditions, you may click “Agrees & Apply”

  1. Fill in all the information and your desired units to subscribe.
  2. Double-check your CDS account no. and other details. 
  3. If all are good, you may click “Submit”.

Above are the examples to subscribe to IPO through online banking. Should you encounter any technical issues while submitting your application. Kindly contact your bank. 

Investing in IPO

Usually, companies will put a lot of effort into promoting their IPO to make sure there are enough subscribers for them to get listed. (there’s a threshold of subscribers for all IPOs. IPO will call off if the company is not able to meet the minimum required subscribers.)

However, big companies or companies with strong foundations (financially or future growth expectation), will attract many investors during the IPO. The first will be fund houses, high net worth private investors, or institutional funds will be in. To make it fair to all investors, usually big IPOs will tend to oversubscribe and will fall under balloting. Then it depends on your luck whether you will get to subscribe to the IPO. If you are not chosen, then your funds will be refunded to the bank account that you stated in the form or eIPO bank. 

Investing in IPOs having the same risk as investing in stocks that have been listed for a long time. Some investors subscribe to IPOs through “hear-&-see” from friends or news but end up listing the day the price falls below the listed price. 

This might be due to some companies approaching “big boys” to make sure they have enough subscribers to get listed. There will be profit-taking from “big boys” on listing day. Because they invest in an IPO for the short term only, they don’t see any long term benefits from there.

Other factors include, how well is the company managing their stock price as we mentioned earlier. If the company listing purpose is for the sake of having the name of listing but not creating more values through listing and managing their stock price. The company share price will end up not active and have a low floating rate in the market. Which will be difficult for investors to invest in. 

To understand more about IPOs, investments, & trading in the stock market, you may open a trading account with Kelvin Yap under Mplus. He will be sharing ideas & ways to survive in the stock market in his Weekly Market P.O.V. every Monday, 8:30PM via webinar. 

Trading Account Opening

They are offering IntraDay trade brokerage rate at 0.05% or RM8 whichever is higher for day trading stocks RM 50,000 & above transacted volume (buy sell the same stocks in the same day). Buy & hold at 0.08%or RM8 whichever is higher.

Click here to open a cash account now.

As Kelvin’s trading client, you will be exclusively invited to join Kelvin’s weekly webinar and telegram group.

For more inquiry contact him by email: kelvinyap.remisier@gmail.com or 019-5567829 

If we have missed out on any important information, feel free to let us know and feel free to share this information out but it will be much appreciated if you can put us as the reference for our effort and respect, thank you in advance!

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This blog is for sharing our point of view about the market movement and stocks only. It is not advice or recommendation to buy or sell any financial instrument. Viewers and readers are responsible for your own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.