scholarly journals Determinants of Reluctance to Initial Public Offering in Cameroonian Financial Market

2021 ◽  
Vol 10 (4) ◽  
pp. 115-126
Author(s):  
Simplice Gaël Tonmo ◽  
Melissa Grace Tchapda Woumkep ◽  
Ghislain Tchoffo ◽  
Glwadys Pinta Mefenza
Keyword(s):  
Stock Market ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Pearson Correlation ◽  
The Family ◽  
Pearson Correlation Test ◽  
Financial Characteristics ◽  
The One ◽  
Public Offering ◽  
The City

The main objective of this study was to identify the specific characteristics of companies in Cameroon and to highlight the factors that explain their reluctance to be listed on the stock market. Thus, in order to build the state of the art appropriate to this objective, we had to follow three lines of investigation: the theories related to the listing of firms on the stock market, their specific characteristics, and the cross-fertilization of these two fields. On the basis of the literature, four explanatory hypotheses were deduced: they are related to the shareholding structure of firms, to the financial characteristics, to the size of the firm and to the socio-demographic characteristics of the managers. To test these hypotheses, a survey was conducted among 40 SAs in the city of Douala. The data was processed with the SPSS 20 software and we used flat sorting, cross-sorting, pearson correlation test as well as linear regression. This methodology allowed us to obtain the results according to which the family and filial character and the size of the company are mainly the factors of reluctance of the listing on the stock exchange on the one hand, and the behavioral factors of the company managers, in particular the level of education and the experience on the other hand.

Revisiting the viability to allow dual-class share structure companies to list in the financial market of Hong Kong

2018 ◽  
Vol 47 (3) ◽  
pp. 167-195 ◽  
Author(s):  
John Kong Shan Ho
Keyword(s):  
New York ◽  
Hong Kong ◽  
Initial Public Offering ◽  
Financial Market ◽  
Stock Exchange ◽  
The One ◽  
Public Offering ◽  
The Right ◽  
Dual Class ◽  
Share Structure

The request of Alibaba, China’s largest e-commerce company, to allow a self-selected group of its past and present management known as the ‘partners’ the right to nominate a majority of the directors in its negotiation with the Hong Kong Stock Exchange (HKEx) for an initial public offering (IPO) in 2013 reignited a new round of debate over the one share, one vote policy, which has survived for three decades in Hong Kong. Alibaba’s IPO application to list on the HKEx was eventually rejected which ultimately led to the company’s decision to list on the New York Stock Exchange. In late 2017, the debate on whether companies with dual-class share (DCS) structure should be allowed to list in Hong Kong re-emerged as the HKEx has announced that it would amend its listing rules to enable companies with DCS structure to list on its exchange, subject to certain safeguards and restrictions. This article examines what measures Hong Kong could adopt to allow companies with DCS structure to list on its exchange despite legal and institutional shortcomings of its financial market. In doing so, it will also make reference to other major financial markets in the world and examine how other jurisdictions have handled the issue of DCS structure companies.

scholarly journals Impact of Macroeconomic Factors on Underpricing: Case of Indonesia Stock Exchange

InFestasi ◽  
2021 ◽  
Vol 17 (2) ◽  
pp. Inpres
Author(s):  
Aulia Amin Nasution ◽  
Ali Mutasowifin
Keyword(s):  
Stock Market ◽  
Initial Public Offering ◽  
Stock Price ◽  
Stock Exchange ◽  
Composite Index ◽  
Secondary Market ◽  
Macroeconomic Factors ◽  
Macroeconomic Variables ◽  
Public Offering

The stock market is one of the alternatives chosen by companies to meet their funding needs. The first offering of a company's shares through the stock market to investors is called an Initial Public Offering. At the time of initial public offering, underpricing often occurs when the initial stock price on the primary market is lower than the stock price on the secondary market which will disadvantage the company because the collected funds are not maximum. This research aims to analyze the effect of macroeconomic factors on underpricing in companies conducting IPOs listed on the Indonesia Stock Exchange from 2010 to 2020. Using Regression Linear Analyze we found that macroeconomic variables as Inflation, IDX Composite Index, and GDP significantly affect underpricing on IPO in Indonesia Stock Exchange for 2010 to 2020

At-Tahur’s IPO: Creating Pakistan’s First Public Company in Pasteurized Dairy Segment

2021 ◽  
pp. 097282012110396
Author(s):  
Sana Tauseef
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Discounted Cash Flow ◽  
Ipo Underpricing ◽  
Strike Price ◽  
Flow Models ◽  
Public Company ◽  
One Year ◽  
The One ◽  
Public Offering

This case examines the initial public offering (IPO) decision made by At-Tahur Limited during 2017. The outstanding performance of the equity market led the company to decide in favour of stock issuance to finance its required expansion. However, soon after the company started its IPO process till the month when the shares were floated in the market, Pakistan Stock Exchange experienced its worst decline since the financial crisis, with the index dropping by 17% over the one year from July 2017 to July 2018. The IPO was oversubscribed, and the company was able to sell its shares at PKR 21 per share, higher than the floor price of PKR 20. The strong demand for the company’s shares and a successfully completed stock offering transaction during one of the most difficult periods in capital market history left the IPO management team confused about whether PKR 21 was an appropriate price for the company’s share and if it was the correct time for the company to go public. The case provides an opportunity to discuss the valuation of unseasoned equity using market multiples and discounted cash flow models. Students are invited to value At-Tahur’s stock in light of the company’s planned expansion and take a position on whether the IPO strike price of PKR 21 was correct. The case also allows for a discussion of IPO trends, costs and benefits of going public and the IPO underpricing phenomenon.

scholarly journals Examining the Existence of Long-run Initial Public Offering (IPO) Underperformance at Three Different Stock Exchange Markets in Japan

2016 ◽  
Vol 7 (2) ◽  
pp. 190
Author(s):  
Yoshiki Shimizu ◽  
Hideki Takei
Keyword(s):  
Market Efficiency ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Sampling Period ◽  
Efficient Market Hypothesis ◽  
Japanese Market ◽  
Long Run ◽  
The One ◽  
Public Offering

This study conducted the examination of the long-run performance of IPO stocks in the Japanese market by measuring the monthly AAR/CAAR of sample IPO stocks. The study did this, so as to investigate whether IPO stocks in the Japanese market outperform in the long-run, as prior research on this phenomenon in the US market (Ritter, 1991; McDonald and Fisher, 1972) had found. The finding is that on the one hand, at TOPIX and TSE-2ND, stocks IPO firms that went public during 2004 to 2011 did not underperform the market in the long-run, as the monthly CAAR of sample IPO stocks on month 36 was not statistically significant. On the other hand, the finding also reveals that at MOTHERS, IPO firms underperformed the market throughout the period between months 2 and 36, and the monthly CAAR of IPO stocks at this market was –30.08 percent on month 36. The implication of this finding for the Efficient Market Hypothesis is that market efficiency held well at TOPIX and TSE-2ND; where during the sampling period abnormal returns could not be achieved and thus the long-run IPO underperformance was unlikely to occur. On the contrary, the departure from market efficiency was observed at MOTHERS: In the long-run, IPO stocks kept experiencing negative abnormal returns, and the existence of the long-run IPO underperformance was found to be significant.  Long-run IPO underperformance did not exist, with only one exception: It is only at MOTHERS that the long-run IPO underperformance was observed, whereas at TOPIX and TSE-2ND the phenomenon was not observed. 

scholarly journals The Impact of Internationalization of Sarbanes-Oxley Act to the U.S. Listed Indonesian Companies

2020 ◽  
Vol 1 (2) ◽  
pp. 31-41
Author(s):  
Ahmad Fauzi ◽  
Asri Sitompul
Keyword(s):  
Stock Market ◽  
Initial Public Offering ◽  
Capital Market ◽  
Stock Exchange ◽  
Stock Exchanges ◽  
The Public ◽  
Sarbanes Oxley ◽  
Public Offering ◽  
The Impact ◽  
The U.S

In every country the existence of capital markets is fundamental in the development of the economy. Capital market, in addition to its function as a means to gather and allocate the public funds. Numerous companies attempted to fix up in order to get into a stock market and do the Initial Public Offering (IPO). But it is not an easy job, various preparations should be carried out and of course it takes some time and effort and considerable cost. In addition to stock market laws, the market is also governed by various regulations issued by the market authorities and stock exchanges as the SRO. In the U.S., the authority is the SEC and in Indonesia the capital market authority is the OJK. Stock exchanges such as the NYSE in the U.S. and Indonesian Stock Exchange (BEI) in Indonesia also issued various rules regulate all companies listed the shares in the stock exchanges. Internationalization means to bring something local to the international level. The Sarbanes-Oxley Act is supposed to applicable only in the U.S, it is not applicable in Indonesia. But the law is brought from the U.S brought to Indonesia to be applied to Indonesian companies that have the stocks listed with the U.S stock market. The application of the Act brought some problems to Indonesian companies that have to comply with all requirements stipulated in the Act.

Shariah-compliance and IPO underpricing: evidence from Pakistan Stock Exchange

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Mehmood ◽  
Rasidah Mohd-Rashid ◽  
Ahmad Hakimi Tajuddin ◽  
Hassan Mujtaba Nawaz Saleem
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Ipo Underpricing ◽  
Content Type ◽  
Initial Return ◽  
Asset Volatility ◽  
Financial Characteristics ◽  
Public Offering ◽  
The Impact

Purpose This study aims to investigate the effect of Shariah-compliant status and Shariah regulation on initial public offering (IPO) underpricing in Pakistan. Design/methodology/approach Besides the ordinary least square’s method, this study used quantile least squares as a robust approach and stepwise regression for further analysis to investigate the underpricing phenomenon in Pakistan. Data of 84 IPOs listed on Pakistan Stock Exchange from January 2000 to December 2018 were collected to determine the impact of Shariah-compliant status and Shariah regulation on IPO underpricing. Findings Results of the study show that Shariah-compliant status has a negative relationship but Shariah regulation has a positive relationship with IPO underpricing. Hence, it is contended that Shariah-compliant firms have lower asset volatility and uncertainty than non-Shariah-compliant firms because of less information asymmetry, resulting in lower underpricing. These Shariah-compliant firms provide signals of high-quality IPOs as they must comply with the strict guidelines issued by the Securities Exchange Commission of Pakistan in addition to being considered as amicable by investors. Further, this study suggests that investors are more attracted to Shariah-compliant firms than non-Shariah-compliant ones. Research limitations/implications This study’s offers limited consideration of nonfinancial and financial characteristics that could influence the decision of investors to subscribe to IPOs. Besides, future studies could consider the screening benchmarks; for instance, debt and cash may explain the intensity of IPO initial return in Pakistan. Originality/value The present work empirically investigated the influence of Shariah-compliant status and Shariah regulation on IPO underpricing in Pakistan’s IPO market, which has been scarcely covered in the existing literature.

ANALISIS TENTANG FAKTOR-FAKTOR YANG MEMENGARUHI INITIAL RETURN PADA IPO DI BURSA EFEK INDONESIA

2017 ◽  
Vol 2 (3) ◽  
pp. 323-330
Author(s):  
Tyahya Whisnu Hendratni
Keyword(s):  
Stock Market ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Listed Companies ◽  
Long Run ◽  
Initial Return ◽  
Public Offering

The initial return on initial public offering (IPO) in Indonesian Stock Exchange (ISX) was stated to be under-pricing. However, the underpricing of initial return was still inconclusive. Some of the previous findings showed that the initial return on IPO tended to be under-priced and the expectation of the initial return to being over-pricing still could not be achieved. This study state that the initial listing price has not been related to initial return to achieve the expecting price in the long run. The influence of age of listed companies and the excess of paid in capital on an initial return of the IPO were significant, this is because the underwriter’s pressure on listed companies to put their listing price below the expecting price. Keywords: initial public offering, stock market

scholarly journals Evaluation of Investor Awareness on Techniques used in Stock Trading before their Investment

2018 ◽  
Vol 7 (3.12) ◽  
pp. 98
Author(s):  
B Vidhya ◽  
S Magesh
Keyword(s):  
Stock Market ◽  
Initial Public Offering ◽  
Success Factors ◽  
Stock Exchange ◽  
Secondary Market ◽  
Stock Trading ◽  
Risk Return ◽  
Public Offering ◽  
Indian Stock Market ◽  
Investor Awareness

Indian stock exchange is one of the world’s largest stock market. It holds 16,993,616 active demat account investors as on February 2018, where the investor trade the equities. An equity holding will make the investor to own a percentage of the company’s capital. The value of the investment raise as the company develops, initially it starts with Initial Public Offering (IPO) which will be allotted by the companies. This will be listed in stock exchange for secondary market. The investor decides whether to hold the stock for a longer or shorter period depending on the percentage of returns. Most of the research studies had concluded that Indian stock market is highly volatile, sensitive, reactive to news and unanticipated shocks. This instantly has an impact on the market trend activities, but it resilient and recovers soon. The investor aims for high returns on the investment, and experience a high risk . Since the direction of market is unpredictable and lack of knowledge for the success factors, leads to fear on investing in stock market. Practically the risk and returns are directly proportional. However the risk-return perceptions of the investor may vary.The aim of this study is to analyse acquaintance level of the investor in stocks trading and the technical knowledge to overcome the risk factors while trading in live market before investing.  

Pengaruh Reputasi Underwriter, Umur Perusahaan, dan Persentase Penawaran Saham 53 kepada Publik terhadap Underpricing

2016 ◽  
Vol 8 (1) ◽  
pp. 53-74
Author(s):  
Maria Jeanne ◽  
Chermian Eforis
Keyword(s):  
Initial Public Offering ◽  
Stock Price ◽  
Stock Exchange ◽  
Secondary Data ◽  
Secondary Market ◽  
Financial Statement ◽  
Data Set ◽  
Multiple Regression Method ◽  
Underwriter Reputation ◽  
Public Offering

The objective of this research is to obtain empirical evidence about the effect of underwriter reputation, company age, and the percentage of share’s offering to public toward underpricing. Underpricing is a phenomenon in which the current stock price initial public offering (IPO) was lower than the closing price of shares in the secondary market during the first day. Sample in this research was selected by using purposive sampling method and the secondary data used in this research was analyzed by using multiple regression method. The samples in this research were 72 companies conducting initial public offering (IPO) at the Indonesian Stock Exchange in the period January 2010 - December 2014; perform initial offering of shares; suffered underpricing; has a complete data set forth in the company's prospectus, IDX monthly statistics, financial statement and stock price site (e-bursa); and use Rupiah currency. Results of this research were (1) underwriter reputation significantly effect on underpricing; (2) company age do not effect on underpricing; and (3) the percentage of share’s offering to public do not effect on undepricing. Keywords: company age, the percentage of share’s offering to public, underpricing, underwriter reputation.

APAKAH FAKTOR EKSTERNAL MEMPREDIKSI UNDERPRICING LEBIH BAIK DIBANDINGKAN FAKTOR INTERNAL? STUDI INITIAL PUBLIK OFFERING DI BEI TAHUN 2009-2017

2020 ◽  
Vol 7 (1) ◽  
Author(s):  
Saefudin Saefudin ◽  
Tri Gunarsih
Keyword(s):  
Interest Rates ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Sample Selection ◽  
Secondary Data ◽  
Secondary Market ◽  
Company Size ◽  
Negative Effect ◽  
Underwriter Reputation ◽  
Public Offering

Underpricing is a phenomenon that still occurs in the Indonesian capital market, where the offering price of shares in the primary market is lower than the opening price or closing price on the first day on the secondary market. This study aims to examine the effect of Return On Assets (ROA), Debt to Equity Ratio (DER), company size, underwriter reputation, age, and interest rates on the underpricing of shares in companies’s Initial Public Offering (IPO) listing on the Indonesia Stock Exchange (BEI) in 2009 to 2017. The population in this study are companies that conduct IPOs on the BEI period 2009 to 2017. The sample selection in this study uses a purposive sampling method, based on certain criteria. The sample in this study were 183 underpricing companies from 205 companies conducting IPO in the period 2009 to 2017. The data used in this study used secondary data. The multiple regression analysis was implemented in this study. The results showed that DER, company size, and underwriter reputation did not significantly influence underpricing. While ROA, age and interest rates have a significant negative effect on underpricing. In this study, investors consider ROA, age, interest rates compared to DER, company size, and the reputation of the underwriter to invest in companies that make an IPO.Keywords: Underpricing, Initial Public Offering, and Indonesian Stock Exchange.

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