IPO is very Good for Bursa Malaysia Share Market

Yesterday in my article, I mentioned that IPO is very Bad for Bursa Malaysia share market. Today, I will say the good things of IPO. After reading the two, you make your own judgment.

The more IPOs, the more stocks are available in Bursa Malaysia stock market. The more stocks, the more attractive of Bursa Malaysia. Investors will like to invest in Bursa Malaysia because there are many options or stocks available. Foreign investors also will pay more attention to Bursa Malaysia because more choices.

Just imagine a shopping mall has limited shops and limited choices, less people will go. The owners will then suffer. But if there have variety of shops, more people will go and most of the shops owners will benefits.

Do you want to pay attention to Z country stock market stocks, if there is only less than 10 stocks? Or you prefer to spend time in New York Stock Exchange where it has thousands of stocks, from different industries for you to choose?

For the arguement that $1 billion IPO will suck $1 billion from stock market. Money may actually flow from non-stocks to Bursa Malaysia IPO. Many people apply IPO, not by using stocks money. They use their extra cash, eg savings or FD. If no IPO, they will put back the money to bank and not necessary buy other stocks.

Many argue that the money will flow from stocks to IPOs. Yes, but this is very surface. The money that receive by the IPO company, where does it goes? The money will be used by the IPO companies to invest and expand. Therefore, it create more economy activities and stimulate the economy and cause the economy to grow. As a result, the other stocks will benefit from higher share prices due to higher profits.


After writing the two articles, I have made my own judgement. For a start, due to limited cash, IPO will cause less buying interest in the stock market. But eventually, it will create Bursa Malaysia bigger and more attractive. But then it will come to a point where there is really less money in the economy to sustain the new IPOs. Therefore, IPOs are good for Bursa Malaysia stock market, but it has to be gradual listing of IPOs.

The actual impact nobody will know. All these are just theory, just like economics.

After reading my two articles, you can make your own judgment whether IPO is good or bad for Bursa Malaysia stock market.


More information on recent IPO, here.
http://politemarket.blogspot.com/search/label/IPO


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


Thanks