Readings: Hedge Hunters, AIG Services in India, IPO roulette
- Seeking Alpha: Hedge Hunters (Book Excerpt)
The market changes Ritter foresaw are the result of two trends: in-creased interest in fuel made from corn and other agricultural commodities, and huge inflows into commodities funds from institutional investors. Both have changed the very nature of how commodities trade.
As prices have steadily risen, more pension funds and other large investors have jumped in, buying into funds run by Goldman Sachs and other large financial services firms. The investors betting on commodities these days are doing so for the long haul because they foresee huge demand coming from China and emerging markets. These huge inflows make the market much less predictable in the short term, although in the longer term, the forces of supply and demand still apply.
The New York-based insurer plans to enter mortgage guarantee, wealth management and distressed asset recovery businesses and infrastructure investment.
India, Asia’s third-largest economy, expects to invest about $500 billion building roads, ports and power plants in the next five years to spur economic growth.
- Business Standard: IPO roulette
Of the 85 issues listed till date in 2007, 64 ended in positive territory on day one while 54 have managed that even on current market price.
“IPOs are not underpriced, the key factor driving the significant returns post-listing is the overwhelming demand for good quality paper. There is an excess of financial resources chasing fewer value-added opportunities.”
“A failed issue is not only expensive but is also a reflection of the reputation of the company, especially with the participation of large number of institutions.”
Excess subscriptions, then, are the norm and this is largely due to the presence of qualified institutional buyers, which have at least 50 per cent of the issue reserved for them. With oversubscription comes the bane of grey markets, where issues start trading before the IPO allotment takes place.
Fairly detailed article - lists all major IPOs, lots of statistics, etc.
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