It has become a phenomena that every time an IPO is launching, I will receive a few calls asking if it is a good buy. Investors always have this interesting perception that they buy IPO at discounted price of the stock. Many investors DREAM to become overnight new rich by buying IPOs.

The most recent IPO is Perennial China Retail Trust (PCRT), which deals in retail space in China. The IPO is planning to raising S$776.2 million with units priced at S$0.70 each. This is significantly lower than the $1 per unit which it had planned previously. It were shelved due to concerns of slow growth in China as well as the worsening debt situation in Europe.

Let’s just exam the fates of the hot IPOs in the past; Green lines refer to Straits Times Index, Orange Lines represent the performance of the IPOs.

Mapletree Commercial Trust vs STI (as May 30, 2011)
  • Hutchison Port Holdings Trust

Hutchison Port Holdings Trust vs STI (as May 30, 2011)
CapitaMalls Asia Ltd vs STI (as 30 May 2011)

So I will leave it for you to decide yourself on the fate of Perennial China Retail Trust.

But wait, isn’t LinkedIn IPO which just doubled its price since Thursday debut? Of course, check out who are the winners of the game.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

  • […] People just have short memories. It seems everybody has forgot how disastrous the very recent Facebook IPO %sC/strong>was and how poorly many other IPOs in Singapore have performed in the past. […]

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