IPO is very Bad For Bursa Malaysia Share Market

The more IPO listed in the Bursa Malaysia, it will be worse for the share market. Why? It will cause share prices of other shares to drop.

We don't have unlimited cash. If you have money and wish to buy shares or apply IPO, and if you apply IPO, you will have less money to buy shares. Therefore, the new IPO has reduced the demand for shares. The more IPOs, the more money will be flowed from stocks to IPO. $200 million IPO will then suck about $200 million from stock market. $1 billion IPO will suck $1 billion from stock market.

Some even worse, some sell shares to buy IPO. The selling will then create more supplies in stock market and cause the price to drop.

First day of listing of IPO will normally be one of the top volume stocks traded. Therefore, investors will divert the attention to IPO stock from other stocks.

Therefore, the more IPO, the more money will be flowed from stocks to IPO. Total IPO worth $10 billion will cause $10 billion worth of money to flow from stocks to IPO.

Conclusion, IPO is very bad for Bursa Malaysia Share Market.

But this is just statement that make sense, we cannot really calculate the impact of IPO. This is also a very surface type of thinking. If we think deeper, IPO can actually be good to stock market.

Tomorrow I will post the article on "IPO is very Good For Bursa Malaysia Share Market". After reading these two articles, you make your own judgment.


For more information on recent IPOs, here.
http://politemarket.blogspot.com/search/label/IPO

My blog link.
http://politemarket.blogspot.com/


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