It is now possible for investors planning to subscribe to the $1.84 billion rights issue of CapitaLand to apply through an ATM (automated teller machine). With this system, which is like an IPO or initial public offering, investors are able to save more time.
CapitaLand has about 60,000 shareholder base and according to them, the use of ATMs is a “very efficient and cost-effective way of applying for the rights issue”.
There will be an application fee of $2, which is comparatively inexpensive compared to the cashier’s order worth $5 if investors opt to fill in a form and send it to the Central Depository (CDP). Additionally, ATMs are way too accessible as there are about thousands of it scattered all over Singapore.
Investors should also be aware that CDP offices close at 12.30PM on Saturdays and at 5PM on weekdays. While ATMs of United Overseas Bank, OCBC Bank and DBS Bank are available from 7AM to 9.30PM on Mondays through Saturdays. Those who are investing in rights issues prefer less in using ATMs compared to those who subscribe for IPOs.
DBS Head of equity capital markets and Managing Director Kan Shik Lum stated that around 99 percent of retail investors usually choose ATMs in applying for initial public offering. However, only 70 percent of the total investors choose to subscribe to the $4 billion rights issue of DBS, which was opened last December, through ATMs.
Firms now prefer to launch rights issues as a way of raising funds, not to forget about the credit crunch. To date, about 18 rights issues are already completed or declared, totalling to about $8 billion. However, these numbers are expected to continue on increasing as companies find ways on how to intensify their balance sheets, said Mr. Kan.