What is meant by an IPO?

An initial public offering involves listing a portion of a firm’s shares on the stock market. The firm is known as the issuer. The issuer may float on the Stock Exchange either by raising capital by issuing new shares or by selling a portion of its share capital by offering shares which already exist.

Who can take part in an IPO?

Any individual or corporate entity wishing to invest may subscribe for shares in an initial public offering, thereby becoming a shareholder in the company.

What is gained by subscribing for shares in an IPO?

By becoming a shareholder, the subscriber will enjoy several benefits :   It will receive a share of the company's profits known as a dividend based on the number of shares that it owns;   It will benefit from any capital gains arising from a rise in the company’s share price;   It will be investing in a liquid investment since it may sell its shares in the market at any time.

When should one subscribe for shares in an IPO?

Subscription for shares in an IPO is made during the subscription period between the opening and closing days of the said subscription period. The subscription period generally lasts for between 3 and 10 business days. It may be closed early on the issuer’s request.

What does one need to know before subscribing for shares in an IPO?

Before subscribing for shares in an IPO, it is very important that the subscriber reads the prospectus. This will enable potential shareholders to form their own opinion about the company and to make their own decision about the investment opportunity. The prospectus is available to the public:   At the “Stock Exchange Desk” at the Casablanca Stock Exchange’s registered office ;   On the Casablanca Stock Exchange’s website www.casablanca-bourse.com ;   At the registered office of the firm making a public share offering ;   At branches of those banks and brokerage firms participating in the offering as a member of the placing syndicate.

How to subscriber for shares in an IPO?

The first step consists in opening an account with a financial intermediary which may be a bank or brokerage firm. The second step, which is the subscription, consists of placing a buy order with a member of the placing syndicate which is a pool made up of brokerage firms and banks responsible for selling the securities in question. The subscriptions are subsequently centralised at the Casablanca Stock exchange which oversees, on the date set in the IPO timetable, the allocation of securities and the generation of trades. Delivery of securities and cash payment take place three business days following initial trading in the securities.

How much does it cost to subscribe?

Fees Ex. VAT Brokerage commission (brokerage firms)   Negotiable Stock Exchange fees (Casablanca Stock Exchange) 0.10% Other fees   0.10% for collecting orders 0.20% for settlement & delivery of securities