LONDON, July 4, 2011 /PRNewswire/ --
Glencore's initial public offering was the largest IPO ever seen on the London market when it made its debut back in May 2011. However its performance was ultimately disappointing and its shares struggled to move beyond its expected launch price of 530 pence. Joshua Raymond of spread betting provider City Index (http://www.cityindex.co.uk/) weighs up the merits of speculating on new IPOs:
"New IPOs can also be very hard to read," states the Chief Market Strategist. "Technically, you simply cannot entertain any technical analysis on prices as there is no historical price action to help determine future price trends. This means that one will most likely be basing research on fundamentals, which may not necessarily be everyone's expertise."
That said, some new IPOs can be fruitful for traders. Mr. Raymond continues: "One of the most recent and tremendously successful IPOs is that of fashion retailer Super Group, owner of the Super Dry brand. The retailer launched an IPO in March 2010 at a launch price of 502p. By February this year, share prices hit a new record high of 1898p, rallying some 278% in the space of just 11 months trading as a publicly listed company."
"But it has not all been one way, and recently its share price has fallen by some 45% from its February highs, proving just how volatile new IPOs can be and why timing can be everything."
Discover up-to-date market insights at:
http://www.cityindex.co.uk/market-analysis/
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to instruments including CFDs and, in the UK, spread betting.
We constantly look to improve the performance of our trading platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for more on financial trading.
Contact: Joshua Raymond, City Index, +44(0)20-7107-7002, joshua.raymond[at]cityindex.co.uk
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