scholarly journals A Review Of The Determinants Of Long Run Share Price And Operating Performance Of Initial Public Offerings On The Johannesburg Stock Exchange

2014 ◽  
Vol 13 (5) ◽  
pp. 1161 ◽  
Author(s):  
Chimwemwe Chipeta ◽  
Adrian Jardine
Keyword(s):  
South African ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Operating Performance ◽  
Negative Relationship ◽  
International Investment ◽  
Share Price ◽  
Public Offerings ◽  
Johannesburg Stock Exchange ◽  
Long Run

This paper provides some new evidence on the determinants of long run operating and share price performance of Initial Public Offerings (IPO) on the Johannesburg Stock Exchange (JSE). It has been hypothesised that the information contained in the pre listing documents could shed some light on the aftermarket performance of South African IPO shares. In line with previous literature, South African IPO shares significantly underperformed the market on average. Additionally, there is a statistically significant negative relationship between IPO Volume and long run performance, suggesting that the South African IPO market may be subject to the fads and over optimism theory of Ritter (1991). The overoptimism hypothesis is further cemented by a negative correlation between pre IPO revenue forecast and aftermarket operating performance. Listing expenses play a moderate role in the reduction of the aftermarket performance of IPOs on the JSE. However, it appears that international investment banks have a positive influence on the aftermarket performance of IPOs on the JSE. Likewise, firms audited by the BIG 4 audit firms tend to perform well in terms of aftermarket buy and hold returns. Large firms at the time of listing tend to perform well and firms with high growth prospects at the time of listing generate a negative and significant return on their investment in total assets. Although the contingent liabilities disclosed in the prelisting reports negatively influence most of the measurers of aftermarket performance, the relationship is, by and large, insignificant.

The long run performance of secondary equity offerings on the Johannesburg Stock Exchange

2018 ◽  
Vol 13 (5) ◽  
pp. 1211-1232
Author(s):  
Jesse Alves da Cunha ◽  
Yudhvir Seetharam
Keyword(s):  
Stock Exchange ◽  
Operating Performance ◽  
Investor Sentiment ◽  
Seasoned Equity Offerings ◽  
Equity Offerings ◽  
Content Type ◽  
Market Participants ◽  
Johannesburg Stock Exchange ◽  
Long Run ◽  
The Impact

Purpose Opinions have been divided on whether there is a rational explanation to the reason behind seasoned equity offerings (SEOs) or whether the explanation lies within the behavioural intricacies attributed to stock market participants. The paper aims to discuss these issues. Design/methodology/approach This study investigates the long-run performance of firms conducting SEOs on the Johannesburg Stock Exchange (JSE) over the period of 1998–2015, by examining the return performance and operating performance of firms, along with the impact of investor sentiment on these variables. Findings The results of this study are inconsistent with the existing literature, which argues that the long-run performance of issuing firms signalled an initial underreaction to SEOs buoyed by over-optimistic investors. Research limitations/implications Instead, the long-run performance of issuing firms is adequately explained by the rational models centred on the risk-return framework, implying that investors are reacting swiftly to SEOs in an unbiased fashion. Originality/value Investor sentiment does not materially influence the long-run share performance or operating performance of issuing firms, casting doubt on the ability of the market timing theory to explain the long-run performance of SEOs. The authors thus find that SEO performance cannot be explained by behavioural-based reasoning, in contrast to some asset pricing studies on the JSE which indicate the role of sentiment in explaining returns.

South African corporate governance faces key reckoning

2019 ◽  
Keyword(s):  
Corporate Governance ◽  
South African ◽  
Stock Exchange ◽  
White Collar Crime ◽  
Share Price ◽  
Content Type ◽  
Johannesburg Stock Exchange ◽  
Regulatory Changes ◽  
State Capture ◽  
Criminal Charges

Subject South African corporate governance. Significance Johannesburg Stock Exchange (JSE)-listed IT company EOH, which has seen its share price decline by over half in 2019, announced on October 11 it would press criminal charges against employees implicated in corruption. As South Africa’s institutions begin to grapple with the spectre of ‘state capture’, public pressure is growing to tackle more sophisticated ‘white-collar’ crime. Impacts Large institutional investors will increasingly refine their approach to evaluating firms, including how they determine governance quality. A major UK-based report on auditing due later this year will likely result in similar regulatory changes elsewhere, including South Africa. The Financial Sector Conduct Authority enforcement head has vowed firmer action against transgressors of financial market regulations.

scholarly journals The Berlin Stock Exchange in Imperial Germany: A Market for New Technology?

2016 ◽  
Vol 106 (11) ◽  
pp. 3558-3576 ◽  
Author(s):  
Sibylle Lehmann-Hasemeyer ◽  
Jochen Streb
Keyword(s):  
Initial Public Offerings ◽  
Industrial Revolution ◽  
Stock Exchange ◽  
New Technology ◽  
Going Public ◽  
Public Offerings ◽  
Imperial Germany ◽  
Long Run ◽  
Innovative Firms ◽  
Surprising Fact

Analyzing 474 cases of firms going public in the German capital between 1892 and 1913, we show that innovative firms could rely on the Berlin stock market as a source of financing. Our data also reveal that initial public offerings (IPO) of innovative firms were characterized by particularly low underpricing, comparatively high first trading prices, and no long-run underperformance. We interpret these empirical results as evidence for the surprising fact that in the period of the Second Industrial Revolution the Berlin stock exchange was already a well-functioning market for new technology. (JEL G14, N23)

scholarly journals Strategy and performance of South African listed family companies

1980 ◽  
Vol 11 (1) ◽  
pp. 5-8
Author(s):  
Rob Mackintosh
Keyword(s):  
Organizational Development ◽  
South African ◽  
Stock Exchange ◽  
Share Price ◽  
Business Policy ◽  
Johannesburg Stock Exchange ◽  
Professional Management ◽  
Small Base ◽  
And Performance ◽  
Business Family

An impressive body of theory on organizational development, performance, strategy and structure has developed over the last two decades. Much of what we know stems from direct observation (usually in the form of case-studies), first-hand experience, and common sense. Yet surprisingly little attempt has been made to test the theories and provide an empirical base with which to confirm or reject the theories. This study suggests that the traditional theories of organizational development are vindicated - that firms develop from entrepreneurial, family companies in the first stage to professional management in later stages. Furthermore, an analysis of share-price movements suggests that single business family companies on the Johannesburg Stock Exchange do not perform as well as those which adopt more diversified strategies. This study builds on the small base of previous research, and hopefully makes a contribution to our knowledge both in the academic/teaching sphere of business policy, and in the area of organizational change.'n Indrukwekkende versameling van teorie oor organisasieontwikkeling, en die prestasie, strategie en struktuur van ondernemings is oor die afgelope twee dekades ontwikkel. Ons kennis het ontstaan uit direkte waarneming (gewoonlik in die vorm van gevallestudies), eie ervaring, en gesonde verstand. Tog is min pogings aangewend om die teoriee te toets en 'n empiriese basis te skep waarvolgens die teoriee bevestig of verwerp kan word. Hierdie studie stel voor dat die tradisionele teoriee van organisasie-ontwikkeling geregverdig is - dat firmas van entrepreneuriele familie-ondernemings in die eerste stadium, tot professionele bestuur in latere stadia ontwikkel. Verder dui 'n ontleding van aandeleprys-bewegings aan dat enkelbedryf familiemaatskappye op die Johannesburgse Aandelebeurs nie so goed vertoon as die wat meer gediversifiseerde strategiee aanvaar het nie. Hierdie studie bou voort op die klein basis van vorige navorsing, en maak hopelik 'n bydrae tot kennis sowel in die akademiese/onderrigsfeer van bestuursbeleid, as op die gebied van organisasieverandering.

scholarly journals Investigating board diversity in South Africa

2015 ◽  
Vol 8 (2) ◽  
pp. 392-414 ◽  
Author(s):  
Nadia Mans-Kemp ◽  
Suzette Viviers
Keyword(s):  
South African ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Business Case ◽  
Board Diversity ◽  
Johannesburg Stock Exchange ◽  
Earnings Per Share ◽  
Significant Negative Relationship ◽  
The Relationship ◽  
Research Period

The issue of board diversity has been widely debated. Given the lack of conclusive empirical evidence, this study investigated the relationship between gender and race board diversity and the financial performance of South African companies. The sample covered 1 542 annual observations over the period 2002 to 2012. The percentage of female and black directors of companies listed on the Johannesburg Stock Exchange increased significantly over the research period. Board diversity differed considerably across industries. A statistically significant positive relationship existed between the percentage of both female and black directors and earnings per share. In contrast, a statistically significant negative relationship was found between the percentage of both female and black directors and total shareholder return. Given the lack of a clear business case, the question arises as to how board diversity on the JSE can be encouraged. The researchers recommend that more attention should be given to the development and mentoring of diverse board candidates.

scholarly journals The Aftermarket Performance of Initial Public Offerings in Pakistan

2016 ◽  
Vol 21 (1) ◽  
pp. 23-68
Author(s):  
Muhammad Zubair Mumtaz ◽  
Zachary A. Smith ◽  
Ather Maqsood Ahmed
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Activity Period ◽  
Risk Level ◽  
Public Offerings ◽  
Explanatory Variables ◽  
Market Sentiment ◽  
Long Run

This paper estimates the aftermarket performance of initial public offerings (IPOs) listed on the Karachi Stock Exchange. The evidence confirms that IPOs generate statistically significant abnormal returns in the short run, which indicates that underwriters initially underprice IPOs when analyzed using a short time horizon. However, when using longer time horizons to estimate abnormal performance, the results indicate that IPOs underperform in the long-run. There is an apparent dislocation between the initial valuation set by underwriters and the premium paid by the market for these new issues. The market sentiment that causes this temporary disequilibrium eventually fades and the market reprices the newly issued shares. We conduct an extreme bounds analysis to test the sensitivity and robustness of 16 explanatory variables in determining the long-term performance of unseasoned newly issued shares. The results indicate that the long-term investment ratio, industry affiliation, market-adjusted abnormal returns, financial leverage, return on assets, IPO activity period, the aftermarket risk level of unseasoned issues, and the post-issue promoter’s holdings variables significantly affect IPOs’ aftermarket performance. Theoretically, the overreaction hypothesis, ex-ante uncertainty hypothesis and window-of-opportunity hypothesis best explain IPOs’ aftermarket performance in this study.

The Long Run Share Price Performance of Malaysian Initial Public Offerings (IPOs)

2006 ◽  
Vol 0 (0) ◽  
pp. 061205074620011-??? ◽  
Author(s):  
Nurwati A. Ahmad-Zaluki ◽  
Kevin Campbell ◽  
Alan Goodacre
Keyword(s):  
Initial Public Offerings ◽  
Share Price ◽  
Public Offerings ◽  
Price Performance ◽  
Long Run

MANAJEMEN LABA PADA PERIODASEBELUM DAN SESUDAH PENAWARAN SAHAM PERDANA DI BURSA EFEK JAKARTA: ANALISIS DENGAN MODEL DEANGELO

2006 ◽  
Vol 2 (2) ◽  
pp. 67
Author(s):  
Elisa Indah ◽  
Erny Ekawati
Keyword(s):  
Real Estate ◽  
Earnings Management ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Operating Performance ◽  
Discretionary Accruals ◽  
Building Construction ◽  
Financial Statement ◽  
Public Offerings ◽  
Industrial Group

The previous research fotmd empirical evidence about existence of earnings monagement of suuraunding IPO (Initial Public Offerings). Previous reseqrch also found that operating performance at period after IPO less than before IPO. The purposes of this research is to reexamine earnings management surrounding IPO and association earnings manog"*"it surrotmding IPO with the operating performance in Indonesiancapital market.This study uses the companies data conducting IPO on 88 /irms that went at Jakarta Stock Exchange for the periods 1995-2002. Company do not the included in industrial group of property, real estate and building construction, and industrial group of finance. The method used toexamine eantings management are the method that develop by DeAngelo.Ihe result of this study by using t-test is fomd that firms manage theiremnings to increqse reported income before IPO and after IPO. It meansthat IPO issuers make income increasing discretionary accruals in thefmancial statement before IPO and in the financial statement afier IPO.In this study by using double regression examination also found thatoperoting performance after IPO less than before IPO. This conditionis consequence firms conduct earnings managetnent before IPO untilhappen underperformance after IPO.Keywords z IPO, earnings management, income increasing discretionaryaccruals, operating performance, DeAngelo model.

Sign in / Sign up

Export Citation Format

Share Document