Bm 0053 - Capital Market & Financial Instruments

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School of Business Management

BM0053- Capital Market & Financial Instruments

ICA, Semester 1, 2015/2016

Module Group: FD-02 (iFAST Corporation Ltd.)

United Financial Consultants (UFC)

Date of Submission: 10 July 2015

    Done By:

Executive Summary

This report provides an analysis and evaluation of iFAST’s past and future trends of growth and valuation to determine whether investors should invest during the IPO and/or the current market price.

Methods of Analysis included both fundamental and technical. Our fundamental analysis was done on seven base factors, namely- 1) Invitation Statistics; 2) Management competency(Alternative to IPO); 3) Required Rate of Returns; 4) Capital Structure; 5)Dividend Policy; 6) Stock performance since, IPO to date; 7) Country & Industry Analysis.

Findings & Analysis done on both basis of fundamentals and technicals were coherent. The methodology of analysis was also, disclosed and was matched with solid representations attached in the appendix.

In the conclusion of the report, the findings & analysis indicated recommendations for our investors to evaluate whether they should invest during the IPO and/or in the current market.

Table of Contents

1) INVITATION STATISTICS        4

1.1        share offer        4

1.2        the gross proceeds and uses of proceeds        

1.3        total listing expenses and “cost of listing”        

1.4        net tangible assets per share (nta=nav)        

2) ALTERNATIVE TO IPO

2.1        debt financing        

2.1.1        bank loan        

2.1.2        bonds        

3) REQUIRED RATE OF RETURNS        6

4) CAPITAL STRUCTURE        7

4.1        ifast’s weighted average cost of capital        7

4.2        what values of the company’s debt and equity (eg. book value or market value) should be used?        

5) DIVIDEND POLICY

5.1        ifast’s dividend policy        

5.2        fair value of the shares (ddm)        

6) STOCK PERFORMANCE- SINCE IPO TO DATE        8

6.1        initial ipo        

6.2        technical analysis        

7) COUNTRY & INDUSTRY OUTLOOK AND ANALYSIS        9

7.1        economic conditions in the region        9

7.2        business conditions in the industry/sector        

7.3        peer group analysis        

7.4        various risks faced by the company        

8) RECOMMENDATION        11

APPEDICES        12

WORKS CITED        18

Introduction

iFAST Corporation Ltd is an Internet-based investment products distribution platform, with assets under administration(AUM) of approximately $5.36 billion as at 31 December 2014. Consolidated in the year 2000 in Singapore, iFAST provides a comprehensive range of services, including investment administration and transaction services, research and trainings, IT services and backroom functions to banks, financial advisory firms, financial institutions, Multinational Companies (MNCs), and investors in Asia. iFAST is domiciled in Singapore, with a presence in Hong Kong, Malaysia and China.

1. Invitation Statistics

1. Share offer

iFAST Corporation Ltd. offered 32,800,000 new shares comprising: (i) 2,800,000 public offer shares at S$0.95 for each public offer share by way of the public offer; and (ii) 30,000,000 placement shares at S$0.95 for each placement share by way of the placement, payable in full on application.

[Refer to diagram 1] (iFAST Corporation Ltd, 2014)

1. The gross proceeds and uses of proceeds

Based on the offering Price, iFAST will raise gross proceeds of S$49.2 million from the offering and the cornerstone tranche. The estimated net proceeds from the offering and the cornerstone tranche (after deducting the estimated expenses in relation to the offering of approximately S$4.6 million) will be S$44.6 million. The estimated expenses incurred in relation to the offering and the cornerstone tranche will be borne by iFAST. [Refer to diagram 2]

1. Total listing expenses and “cost of listing”

iFAST incurred an estimated S$1.6, S$1.8 and S$1.2 million for the professional fees, underwriting & placement commision and miscellaneous expenses (including listing fees) respectively. This is an approximate total of S$4.6 million. The total listing expenses and “cost of listing” assumes 9.3% of the total gross proceeds which stands at S$49.2 million. [Refer to diagram 2]

1. Net tangible assets per share (NTA=NAV)

IFAST NTA are calculated as shown below: [Refer to diagram 3]

NTA = Total assets - Intangible assets - Total liabilities

        = $81,093,272 - $1,791,575 - $14,188,220