SYDNEY, May 20, 2011 /PRNewswire/ -- With news of Glencore's IPO and discussion of LinkedIn's price movement since floating overnight dominating the news headlines, Australian investors should consider their options of how they can access these major international floats.
For Australian investors there are a number of ways to access these international shares that have recently floated. For most local investors, the obvious access point that springs to mind is to use a local broker who offers international shares.
Another option, is to use a share CFD. Firstly, it must be emphasised that when trading CFDs, it is advised that you have a sound level of market knowledge and are aware of the risks involved.
As an Australian investor, there are two possible strategies for using CFDs to access LinkedIn and Glencore shares.
Firstly, share CFDs allow investors exposure to 'tonight's trading'. That is, if local investors decide to incorporate international shares in their portfolio, CFDs are a product that allows them to do this cost efficiently (lower cost to trade, no custody fees, no transfer fees), in AUD (no need to exchange currencies) and from the one account/one platform.
Secondly, share CFDs can allow investors to hedge their existing exposure to these shares. Investors may have already purchased share holdings in LinkedIn and/or Glencore, but wish to protect their share holdings in the event that the share price falls. Share CFDs allow an investor to 'hedge' and protect their existing share portfolio.
LinkedIn: This business networking internet company has stunned investors on debut. The IPO was priced at the top end of the indicated range of U$42-45, valuing the company at U$5 billion. On the first day of trading, the shares hit a high of U$122.69 before closing at $94.25. A number of analysts have expressed concerns at this valuation level, suggesting it implies a value of $130 for each of the 75 million users, against annual advertising and recruiter revenue per user of $4. Others point to LinkedIn's ability to increase revenues from the existing base through application development, and its position as the premier business networking internet tool. These conflicting views could generate further share price volatility before an equilibrium is reached.
Glencore: Glencore will commence trading in London and Hong Kong on Tuesday 24 May. The company is a vertically integrated, pure commodity play. Its marketing business and significant share holdings in companies like Xstrata set it apart from other global mining groups, and suggest its earnings stream may be less exposed to fluctuations in commodity prices. The offering will raise around U$10 billion dollars through a sale of 15-20% of Glencore's equity. Broker valuations for the enterprise in a range of U$55-70 billion suggest this is an achievable target.
About CMC Markets
The CMC Markets Group, a leading independent financial services provider, offers a range of investment products and investment tools including shares, options, listed managed investments, warrants, interest rate securities and Contracts for Difference (CFDs). Through our partnerships we can also provide access to managed funds and margin lending execution. In 2007 CMC Markets launched its broking service with the acquisition of Andrew West Stockbroking and CMC Markets Stockbroking is now one of the only non-bank aligned, online stockbrokers in Australia. CMC Markets' institutional partner Goldman Sachs owns a 10% stake in the company.
CMC Markets is a pioneer of CFD trading in Australia and a world leading CFD provider. With offices in London, Frankfurt, Dublin, Madrid, Vienna, Sydney, Tokyo, Toronto, Beijing, Auckland, and Singapore, CMC Markets represents clients in over 70 countries. The company was founded in 1989 and is regulated by ASIC in Australia. CMC Markets Stockbroking is a participant of the ASX Group.
Jane Bryant, PR Campaign Manager
CMC Markets Asia Pacific
Direct Dial: (+61) 2 8221 2124
SOURCE CMC Markets