State-owned giants are also tapping the market, and not only because of the financial benefits. It involves setting an IPO price for the regulators' consideration based on expressions of interest by fund managers and other big investors. It is not unusual for a firm to put out word that its IPO is oversubscribed. But the demand can be real, especially when it involves a billion-dollar company like Singapore Telecom, ranked No. 440 in this year's Asiaweek 1000. When there is oversubscription, Malaysia and Singapore conduct balloting, which theoretically gives all applicants a fair chance.
Bidding is another method.
There are variations. When the Philippine government privatized oil refiner Petron in 1994, it encouraged every Filipino to buy shares, but limited applications to one for each person. After vetting the applicants, the government made sure everyone got a piece of the IPO by setting the ceiling at 1,500 shares for each subscription. For all the pains Manila took, however, there were complaints that some people were able to buy more than what was allowed. Public offerings can be an easy way for politicians and other influential people to reward allies.