In the past, SMEs usually hold by a major individual shareholders by large amount of shares and more than 50% there are much more examples in the market. This will result in low volatility in shares trading in volume, even though there is good news, the share price unable to reflect the its value due to low transaction. Therefore, via the assistance and guidance from investment banks, the shareholders of these SMEs can do either issue more shares or private placement to institutional investors to restructure the shareholdings and gain confidence from the market.
Due to issue more shares will reduce the influence and percentage of shareholdings, issue shares to attract institutional investors to invest in shares will increase the transaction and volatility of shares and attract more institutional investors to invest.
Other than this, in the past, SMEs usually did not use listing to raise funds while they are applying the traditional ways (i.e. by loan and by cash) to raise funds for operation. But now, it had sign that they are trying more other financial instruments method to raise funds such as listing, right issue and bonds. These allow variety of raise funds methods as well as effective management of the funds. In order to raise more funds in market, the exposure of the company is also another important consideration which increasing concern by companies nowadays. This can be done by outsources investors relation services or set up own department. It also require actively work close with media and investment banks as to increase its exposure and message sharing purposes.
WDew Research Centre 