As Asian exchanges increasingly embrace the US model for new listings — the introduction of variable voting rights being a case in point — disintermediated IPOs may perhaps soon be the next fad.
One of the enduring mysteries of IPOs remains the all-elusive institutional investor allocation process. I once heard a hedge fund manager describe it as the method through which you can receive as many shares as you want, in deals that are sure to tank in the aftermarket, and, conversely, as few as possible, in hot, oversubscribed transactions that outperform after the start of trading. read
HONG KONG (Dow Jones Investment Banker) – Allocating distinct retail tranches within equity capital markets deals is a purely mechanical exercise that involves balloting by a share registrar and transfer agent. By contrast, assigning shares to institutional investors is more of an art than a science, and involves making subjective judgment calls. The recent US$2.5 billion equivalent placement by Ping An Insurance (Group) Company of China Ltd. shows how a seemingly simple transaction can leave a sour taste with investors, as well as the importance of structuring and allocating offerings in an even-handed manner.