Being one of the prominent financial markets, capital markets help connect traders or buyers and sellers of stocks, currencies, bonds, and other financial assets. Stocks and bonds are examples of capital market products. They assist people with ideas to become entrepreneurs and small firms grow into large corporations. They also provide possibilities for people to save and invest in their futures.
With DBS, companies can have access to finance through an extensive product portfolio as one of Asia’s top equity and loan houses. They help create, implement, and distribute equity and debt instruments via private and public offerings. Further, clients benefit from DBS’ strong capital markets presence, track record and distinctive market insights, and access to global investors.
Through their dedicated team, they provide essential knowledge in G3 investment grade and high-yield bonds, local currency bonds, bank capital instruments, perpetual securities, structured debt solutions, equity-linked debt, and liability management as a leading bond underwriter in Asian Fixed Income.
Through a full-service equity offering, DBS’ Equity Capital Markets team assists corporations, Business Trusts, and REITs in listing on stock exchanges and raising funding from global equity capital markets.
Here are some of the most frequent capital market solutions provided by DBS:
Pre-IPO investors look for Initial Public Offerings (IPOs): Purchasing shares in an IPO (initial public offering) is a good way to invest money quickly. The business works to raise money and awareness. IPO offerings can also generate enormous returns for investors. While IPOs provide the potential for substantial profits, some investors are snatching up these chances even early and reaping much bigger gains. People can participate in the activity before they become publicly available thanks to these pre-IPO startup investments.
Retail investors were previously excluded from pre-IPO opportunities. Only large banks and influential Wall Street figures had access to investment opportunities. Most individuals just didn’t have a shot, barring employment in the financial sector or being an angel investor. Pre-IPO investing opportunities are changing thanks to online platforms and search engines for alternative investments.
What are Pre-IPO Investments?
Pre-IPO investors are those who have invested in a private company before it was publicly listed on an exchange. These investors usually include venture capitalists, individuals, or investment firms.
IPO companies are typically sold to the public when they seek financing for new projects and expansion. The IPO process involves registering the company with the Securities and Exchange Commission (SEC), which then allows investors to buy shares of stock at IPO prices.
How to Invest in Pre-IPO Investments?
Crypto is not the only thing that is democratizing the financial markets. Regular investors are now able to enter the once-secretive world of finance thanks to a variety of online programs and platforms. Today, there are several avenues to participate in pre-IPO company financing. Your own resources and network may influence how you tackle this endeavor, but everyone can now do so.
Some Examples of pre-IPO investments include:
● Venture Capital investments
● Crowd Funding
● Becoming an Angel Investor, etc.
Private placements are examples of secondary offerings:
Private placements are an alternative way for companies to raise capital. It is a private sale of securities, in which investors have no access to the company’s general partners, major shareholders, or directors. Private placements offer certain advantages over public stock offerings, such as tax savings and a lack of red tape. However, they also have their drawbacks: less public scrutiny and potential disclosure requirements could lead smaller investors to shy away from buying into these deals if they are not familiar with them.
Limited Market Size Allows Companies Choose their Investor
A limited market can be a good thing for private placements because it allows companies to choose who they want to sell to, which in turn limits the amount of competition and ensures that your company gets more attention from potential buyers.
This is also why many investors prefer buying private placements over public offerings, for if you are investing in a company that does not have a large pool of potential buyers, then there’s no guarantee that your investment will succeed (just like if you invest in an IPO).
Block Trades / Vendor Positioning:
Vendor positioning is when vendors use block purchases to guarantee dominance over their competitors. A vendor can do this by buying up all of the competition’s research results and then using those results to manipulate their own research, which in turn makes it more difficult for other vendors to compete effectively against them.
Vendor Positioning can Come in Many Forms
Vendor positioning can come in many forms, like purchasing a large number of positions. It can also include purchasing positions in the same market and/or different markets.
The easiest and most obvious way to do this is by purchasing positions in the same market. For example, if you are bullish on gold, you can purchase contracts for both long and short positions. It will allow you to profit from either direction the price of gold moves during that time period.
Rights Issues and Preferential Offerings:
Rights Issue refers to an offer made by a company to its existing shareholders to buy additional shares in the company at a discount/preferential price. The company offers new shares at a discount to the prevailing market price of the share.
Objectives of Rights and Preferential Offerings
One of the objectives of this issue is to raise additional capital. The company’s current working capital requirements are based on its projections for revenue, which have been significantly higher than expected since it went public. To meet these expectations and fund new projects, we will need additional funds from our investors. In addition, if you hold preferred shares in the company, you may be entitled to receive dividends based on your investment at any time during the first five years following issuance.
The other objective could be to enhance the marketability of the share as it increases the liquidity of shares in the market. For example, if you issue rights shares, these may be offered at an attractive price, and it can increase their market worth. Thus, a company can raise funds from investors by selling rights instead of selling new shares, which have no value until they are issued.
So, if you are looking out for funding to start your business or finance a project, or even expand your business, then you may consider tapping into some capital market products to achieve your goals.