Saturday, May 21, 2016

Why I Didn't Apply for the Manulife IPO

Short post today, triggered by hearing the news of its first day trading.

1. Most IPOs are priced like shit
2. Rather high P/B valuation compared to peers
3. The stock trades in USD (ain't nobody got time to play around with USD)
4. Forex risks

When IREIT and Accordia were launching their IPOs, I remember clearly warning my father that he should not apply for these IPOs. They were horrible offers, and as we all know, they have since become much cheaper, giving more margin of safety and a higher yield. I had to remind him again not to be itchy fingers and apply for this IPO. He was very relieved to hear that it did not perform well on its first day.

I know most people don't believe in the P/B metric that I like to start off with for my basis of REIT evaluation, but the statistic that I'm going to throw up is that the usual P/B premium for office REITs is... NEGATIVE 2%. Which is why its reliable peer group of CapitaComm, Keppel REIT and OUE-C REIT are all trading at negative P/B valuations. Of course, you could just blame this on localised factors, but I still don't think that the Manulife IPO was priced anywhere near enough to be attractive as an investment. Knock off 20% and I might give it a go.

Lastly, it annoys me the shit out of me that this IPO is in USD. Am I going to buy USD and have a USD account so that I can buy USD stocks and receive dividends in USD? Just fuck off. If they had been around in SGD, I would be much more receptive of this addition into the SGX. Of course I know why they are in USD and not SGD. But it just annoys me, okay? Now I just hope that they are shit, because if this turns out to be a good investment, I'm not going to be involved in it. I don't buy USD stocks. Unless it's some super amazing lobang and arbitrage opportunity, it's not worth the effort. Seriously. There's like 700 other stocks on the SGX. Fuck all those foreign currency stocks.

Apply and get IPO doesn't mean sure huat. For every O&G and Jumbo out there, there are twice as many that have gone the other direction, like IREIT, Accordia, POSH, Pacific Radiance, Secura, Anchor Resources, Trendlines, and most hilariously, Soo Kee and TLV Holdings (Taka Jewelry).


  1. Agreed almost all IPOs are sucks.
    And when they are not, retail investors hardly can get even 1 lot.
    There will be a mad ,mad rush by the public that the allocation ratio maybe 1:25 or worst.
    So apply only if there is strong support from the public even though you know you will hardly get any.
    Very rarely apply for IPO lol!

    1. Interestingly, the Hyflux allocation came out 1:1! Is that a good sign or a bad sign? Hmmm....

      I think as a general rule, I skip all IPOs unless there is something really quite special about it. But the odds are plain to see that there are more downs than ups.

  2. I hope you can leave vulgarity out of your post. It's a big turnoff.

    1. Sorry minx m, but that's just the way that I blog. I don't purposely litter my posts with vulgarities, so when I do use it, it is really to emphasize a very strong feeling inside of me.

  3. My apology if it offense you.

    On the other hand it is common knowledge that you are reading "public document"
    (You don't have to read it if you don't want to.)

    It's very common for the younger generation to use the 4 letters word which actually doesn't mean a thing to them.
    It's just seems cool for them to speak this way.

    Nowadays if you watch Ang Moh movies the characters spew 4 letters words like Chinese drinking tea.
    Not that i like it but what can i do?
    Watch it or don't watch it?
    Some Ang Moh movies are more meaningful then Chinese movies besides the #@$* spoken by the Ang Moh actors/actresses.
    This is the Ang Moh movies culture of the time.
    i think you don't watch so much Ang Moh movies lol?

    1. Hi temperament,

      Thanks for coming to my defense. It's okay, you don't need to get so worked up! Relax!

      I hope I can continue to be meaningful to you in spite of my potty mouth!

  4. I think minx m was referring to the vulgarities in GMGH's post, not in your comment, temperament, so you don't have to apologize.

    I'm in my 20s and I find it a turn-off when a post has a lot of swear words too. Which is a shame since the key idea he's bringing across (IPOs are often overpriced) is good one.

    1. Aww J, 3 shits and 2 f words isn't that bad, is it? Sorry, but that's just the way I write. I do swear for emphasis, and not for fun. USD-only investments do piss me off.


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