Wednesday, 8 August 2012

IPOing 101 - How to apply for IPO shares?

I received enough emails from 'new comers' asking how to apply for IPO shares and how to sell them that it may be timely to write a post on this. For seasoned IPO old birds, please bear with this even though it creates new 'competition' for the limited public shares. hahaha. This post only covers applying for the "public tranche" of the IPO shares.

Step 1: Open a CDP account with SGX.  Without a CDP account, you will not be able to apply for the IPO shares as you need to key in your CDP account number the first time you apply for the shares. For your convenience, you may want to open a CDP account with any brokerage firms.

Step 2: Ensure you have an account with our local banks here and the ATM card.

 Whenever a company wants to go for listing, it has to choose an underwriter or placement agent. Which placement agent do you always see on the IPO prospectus? It is none other than DBS Bank. You may wonder why DBS bank is always the "first port of call'? The reason is simple. DBS (together with POSB) owns the widest network of ATM machines in Singapore.

If you ask around, almost everyone here has either a DBS or POSB account or both! This is why if you have a DBS or POSB account, you can probably apply for all the IPOs via their ATMs. This will include applying via their internet banking platform as well. (I will apply for the IPOs via DBS's internet banking if they are available). If there are sufficient time to launch the IPO, the underwriters may then expand this offer to other banking networks such as UOB or OCBC.

Step 3: Apply for the shares at the IPO tranche via ATM or Internet Banking before the closing date and time. Usually before 12pm on a chosen date. The IPO fee is currently $2 per transaction and you will need to have sufficient cash to debit for all the shares you applied.

Step 4: Check the results to see if your application is successful. If you are successful, the shares will be credited to your CDP account. You may start checking for the results from 6pm onwards the next evening after the IPO closed. (You can learn how to read a balloting table here)


Step 5: You may then sell the allocated IPO shares through the "normal cash accounts" of any brokerage firms that you have linked the CDP account with either on-line or with a broker. Some of local brokers are listed below:
  1. DBS Vickers Securities
  2. OCBC Securities
  3. UOB Kay Hian
  4. CIMB
  5. Maybank Kim Eng
  6. Lim and Tan
  7. Phillips Securities
You will not be able to sell the shares through Saxo, IG or Standard Chartered as these accounts are not linked to CDP.

Two very old articles which may interest you.



Happy IPOing. 

28 comments:

boonkhi said...

Thank you so much for your post. I wanted to buy the SPH REIT and have no idea how to do it until I saw your blog!

Mr. IPO said...

Haha. Ok. SPH REIT not open for public yet. You still have time :P

First time IPO buyer said...

If you decide not to sell it and want to just hold it for dividends, how do the dividends come to you?

Mr. IPO said...

Sign up for direct crediting service with CDP to bank into your account. Otherwise will receive cheques

Anonymous said...

Hi, if I applied for an IPO through OCBC internet banking and was allotted some shares, do I have to transfer the shares from my CDP account to my CIMB account before I can sell them? (Cos I don't see the shares under my portfolio when I log into my CIMB account). Thanks much!

Mr. IPO said...

You can sell from any brokers as long as you sell from the Cash Trading accounts linked to CDP. you won't be able to see them under your CIMB account since this is IPO.

Anonymous said...

usually what is the time frame for the IPO shares to be visible through the broker's portal... e.g. poems

Mr. IPO said...

It never will unless u initiate a transfer from CDP to the margin account.

Anonymous said...

ok thanks...means i have to go apply for the cdp internet account

Mr. IPO said...

The brokerage firm can help u open both CDP and trading account at the same time.

suhaw said...

Almost all IPOs are available through the 3 major banks, not just DBS. If you have a UOB or OCBC bank account, it is just as easy to apply.

Mr. IPO said...

That is true in most cases but sometimes the company may be lazy and just stick to one bank as administratively u need time to get the banks to link up or the issue size is too small.

patrick said...

Mr IPO, many thanks for your sharing :)

It is very good for newbie like me.
Do you have idea about where to get the prospect of upcoming IPO?
Samudra energy IPO already can start apply?

Thanks a lot and again :)

MBBS in Philippines said...

It is very good for newbie like me. Thank you so much for your post.

Anonymous said...

Hi Mr IPO,

For those unsuccessful applications, the monies will be debited back to the bank account, e.g POSB account right?
May I know roughly how long will it takes to complete the debit process?
A bit tight on cash flow for IPO. haha

Mr. IPO said...

Usually by end of second day after the IPO closed

Anonymous said...

Hi, thanks for this. It's very useful.
However, the CDP link in step 1 does not seem to be valid... Do you have another link?

Mr. IPO said...

Updated the link. Thanks

http://www.sgx.com/wps/portal/sgxweb/home/depository/retail/app

Anonymous said...

Mr Ipo

After the closed of the ipo and I've allocated some shares. How long will it take for shares to credit or updated in my cdp account?

Mr. IPO said...

It will take about 1.5 days after the close. To be safe, it will usually be credited before the start of trading.

Anonymous said...

Hi Mr IPO,

Is there any restriction on when you can sell your IPO shares from public tranche?

Thank you!

Mr. IPO said...

No restriction for public tranche. You can sell on the first day

Anonymous said...

Mr IPO

I have a CDP acct linked to my DBS acct. I dont have any broker or trading account, does that mean I cannot sell my IPO shares?

Mr. IPO said...

Is your DBS account a trading account or a bank account?

Anonymous said...

Can Joint-CDP account eligible to apply for IPO? Thanks

Mr. IPO said...

Yes. I don't see why not.

Elena Mok said...

HI Mr IPO,

I have recently purchased my first IPO using the DBS ATM and I have been successfully allocated the amount. I called SGX and they say my CDP account has reflected the amount as well. I bought the IPO from a DBS ATM cause my DBS VICKERS account wasn't ready yet. However, after applying for the CDP linkage with DBS VICKERS, I still do not see any IPO amount in my DBS Vickers account. Am I still able to sell my IPO using the DBS VICKERS account (in time to come)?

Mr. IPO said...

You can sell through DBS Vickers or any trading accounts as long as they are linked to CDP. You won't be able to see the shares in DBS Vickers platform as it wasn't held by DBS Vickers directly

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