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What are the methods of issuing new shares in the stock market?

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Question ajoutée par Musdaf Mohamed , Assistant Finance & Accounting Manager , Regnol Oil Kenya Limited
Date de publication: 2013/11/29
Rehan Qureshi
par Rehan Qureshi , Financial Consultant , Self Employeed

Following are the five common methods of share issues:

1) Public Issue - This involves a corporation making an invitation to the general public to subscribe or purchase its shares. For instance, a listed company made a public issue of1,000,000 New Ordinary Shares of SAR.1 each at an issue price of SAR.1.20 per ordinary share payable in full on application.2) Offers for sale - This method involves a corporation selling a new issue of share to an issuing house, and the issuing house will bear the risks of selling shares to other investors.3) Private placing - This method involves an issue of new shares to financial institutions and large private clients rather than making an invitation to the general public to subscribe to shares.4) Bonus issues - A listed company may capitalize part of its reserves by making a bonus issue to the existing shareholders, and no cash will be paid to such issues. For instance, if a corporation declares a1 for5 bonus issue, that means for every5 shares held, an existing shareholder will receive1 share for free.5) Rights issue - A corporation may make a rights issue to its ordinary shareholders. Existing shareholders will be given the rights to buy a new share at a price lower than that listed in the stock exchange.

Mohammed Salim Allana
par Mohammed Salim Allana , Compliance and Assurance Manager , United Arab Bank

It is a lengthy process and different in each country. Check about IPOs (Initial public offering) say for India, SEBI (works under Ministry of Finance) decides.

mukkur srinivasan varadhan
par mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

IPOs,Private placement,Converting the convertible debenture,Converting Convertible preference shares.Issue of bonus shares.

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