Recently, the Malaysian IPO market has been booming. For instance, in 2023, over 30 new stocks have gone public, with an average increase of 62.4% on the first day of listing, and seven of them have doubled in value. Many investors want to join this IPO excitement but have questions about how to participate, the steps involved, and how margin account work. This article will help answer those questions.

1. What preparations are needed before participating in an IPO?

To participate in an IPO through Moomoo MY, you need to open a Moomoo MY universal account and a CDS account-IPO. Once opened, you can conveniently apply for Malaysian IPO online via the moomoo app.

The moomoo CDS account-IPO is specifically for Malaysian IPO applications. For details on how to open a CDS account-IPO, please refer to this link: How to open a CDS Account-IPO.

The steps to open it in the moomoo app are shown in the image below.

Note that according to Bursa Malaysia regulations, while investors can open CDS accounts with multiple brokers or banks, only one CDS account will be approved for each IPO application.

Since the moomoo CDS account-IPO does not handle funds (i.e., you cannot deposit, withdraw, or trade with it), the funds for the IPO application will be frozen or deducted from your Moomoo MY universal account. If the application is successful, the shares will be transferred to the universal account.

Therefore, before participating in an IPO, you must have a Moomoo MY universal account and use its purchasing power for the application. For details on how to open a Moomoo MY universal account, please refer to this link: Open an account with Moomoo MY

2. What is the IPO process?

Subscription Phase:During this phase, investors can start subscribing to new stocks. The required funds for the subscription will be frozen from your Moomoo MY universal account, and this phase usually lasts about a week. Until the deadline, Moomoo MY customers can cancel their subscription, and the frozen funds will be released.

Allocation Phase:The company going public and the issuing company will decide how to allocate the shares and conduct a drawing. This usually happens 2-3 days after the subscription deadline. If you do not get the shares, Moomoo MY will immediately release your frozen funds. If you do get the shares, the allocated amount will be deducted. On the allocation day, the shares will be deposited into your CDS account-IPO and then transferred to your universal account for trading.

Listing Phase:Once the new shares are listed, investors who received the shares can choose to sell them. All investors can buy and sell the newly listed stocks.

3. Can I use financing for subscriptions? Are there interest charges?

If you want to subscribe to more IPO shares, you can use moomoo's margin financing feature to enhance your subscription. This means you can use not only cash but also the buying power generated from your eligible collateral to magnify the subscription size.

Will there be interest charges for financing subscriptions? It depends:

• If you do not get the shares or the allocated amount is less than your available cash, no interest will be charged.

• Interest is only charged if the allocated amount exceeds your available cash, resulting in a debt. The interest is calculated daily, with an annual rate of 6.8%.

The IPO financing covers the subscription period only. Once the IPO share is listed, they are subject to the standard margin requirements. Please monitor your account risk status and top up your margin whenever necessary. For more details, you can refer HERE.

A margin account improves fund utilisation. You can instantly use the proceeds from selling stocks to trade other securities. Without a margin account, funds would only become accessible one to two trading days after settlement completes.

These are some of the most common questions investors have about Malaysian IPOs. If you have any other questions, feel free to leave a comment, and we’ll do our best to answer them.