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Tedypendah
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Posts: 55
Joined: May 26th, 2013, 10:11 am

Important Metrics for Analysts during an IPO

June 22nd, 2017, 11:12 pm

When analysts look at information for a listing or listed entity what are the key metrics they look at? I am thinking of including a sensitivity analysis and risk management report for the prospectus. The quantitative aspect of the RM report will be a 1 year Value Risk.

Basically this will be showing a baseline projection of returns as well as the returns under difference scenarios, so in essence a couple of different balance sheets. I see most prospectuses don't focus on Scenario Analysis or Stress Testing hence I am not sure how the market will react to something like that? But I may be biased since I am a Risk Actuary (CERA).
 
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ppauper
Posts: 11729
Joined: November 15th, 2001, 1:29 pm

Re: Important Metrics for Analysts during an IPO

June 23rd, 2017, 6:34 am

I had to google CERA.
There are (or certainly used to be when the forum had more members) many of us here who hold FRM and/or  PRM, and a lot of forum members who work in middle office risk management

A prospectus is a legal document.
Depending on the jurisdiction (you are in south africa, I think for some reason), the contents of prospectuses are largely prescribed by law
I'd be wary of putting something in there that wasn't required by law as if anything goes wrong, that gives lawyers something to go after. An invitation to a lawsuit.
If you say there's a risk that xyz may happen, that's one thing. If you say there's a 5% chance that xyz may happen and xyz does indeed happen then I'll see you in court and say that you understated the risk