scholarly journals Earnings forecasts errors in prospectuses: evidence from initial public offerings on the Warsaw Stock Exchange

Equilibrium ◽  
2017 ◽  
Vol 12 (2) ◽  
pp. 229 ◽  
Author(s):  
Anna Wawryszuk-Misztal
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Forecast Error ◽  
Value Added ◽  
Earnings Forecasts ◽  
Multiple Regression Model ◽  
Managerial Ownership ◽  
Forecast Horizon ◽  
Public Offerings ◽  
Warsaw Stock Exchange

Research background: Several studies investigated the issue of accuracy of earnings fore-casts disclosed in IPO prospectus because of its importance in the investor’s decisions. Disclosing earnings forecasts can reduce information asymmetry and encourage potential investors to buy offered shares. The accuracy of earnings forecasts, and especially its deter-minants, was explored by some researchers, but for Polish companies such studies have not been conducted.Purpose of the article: The first objective of this study is to examine the bias and accuracy of earnings forecasts disclosed in IPO prospectuses by Polish companies attempting to be listed on the main market of the Warsaw Stock Exchange. The second aim of this paper is to identify the relationship between the absolute fore-cast error employed as a measure of earnings accuracy and a number of company specific characteristics such as company’s size, leverage, forecast horizon, managerial ownership, number of shares offered to investors (in relation to total shares before IPO).Methods: The empirical analysis were conducted on a sample of 102 domestic companies that performed IPOs on the main market of the Warsaw Stock Exchange during 2006-2015 and disclosed earnings forecasts in IPO prospectus. The forecast error (FER) and absolute forecast error (AFER) were adopted as a measure of accuracy of earnings forecasts. The non-parametric test was employed to achieve the adopted aims.Findings & Value added: The results show that, on average, the forecasted earnings exceed the actual earnings (i.e. the earnings forecasts are optimistic) and fore-casts are inaccurate. Moreover, the optimistic forecasts are more inaccurate than pessimistic ones. The findings of multiple regression model show that three independent variables may affect the level of absolute forecast error: the company’s size, managerial ownership and forecast horizon.

scholarly journals A Comparative Study of Initial Public Offerings in Hong Kong, Singapore and Malaysia

2016 ◽  
Vol 4 (1) ◽  
pp. 1-12
Author(s):  
Horace Ho
Keyword(s):  
Hong Kong ◽  
Comparative Study ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Agency Cost ◽  
Managerial Ownership ◽  
Public Offerings ◽  
Subscription Rate ◽  
Highly Correlated ◽  
The Relationship

Abstract This paper presents the findings of a comparative study on the performance of the initial public offerings (IPOs) of shares listed on the Hong Kong Stock Exchange (HKX), Singapore Exchange (SGX) and Bursa Malaysia (MYX). One indicator of the success of an IPO is its subscription rate, which can be used as a proxy for the level of investor confidence in the stock being offered. This paper examines the relationship between the performance of an IPO and its subscription rate, and the corporate factors that may affect an investor’s decision to subscribe to an IPO. A previous study conducted in Hong Kong (Ho, 2013) did not find support for the effect of the four corporate factors, namely size, managerial ownership prior to the IPO, industry differences and company age, on the subscription decision. However, managerial ownership prior to the IPO was found to be highly correlated with good performance, which could be attributed to a low agency cost in situations where managerial ownership is substantial. Further evidence from Singapore and Malaysia can help to shed light on the importance of agency cost in the pricing of IPOs.

scholarly journals Factors Influencing IPO Decisions. Do Corporate Managers Use Market and Corporate Timing? A Survey

2014 ◽  
Vol 42 (1) ◽  
pp. 30-39 ◽  
Author(s):  
Adam Szyszka
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Going Public ◽  
Public Offerings ◽  
Corporate Managers ◽  
Market Mispricing ◽  
Corporate Decisions ◽  
Factors Influencing ◽  
Warsaw Stock Exchange ◽  
Do So

Abstract This paper explores the motives for Initial Public Offerings (IPOs); that is, whether market mispricing or the behavioral inclinations of investors and analysts impact corporate decisions about rising equity, with a particular focus on market and corporate timing practices of managers going public. To do so, an anonymous survey was conducted of 166 managers of firms that recently went public at the Warsaw Stock Exchange in Poland (being the second most active IPO market in Europe, after London). The resulting data reveals that managers attempt to time bullish markets and good historical corporate financial results.

scholarly journals Managerial ownership and catering to investor sentiment for dividends: evidence from the electromechanical industry sector on the Warsaw Stock Exchange

2020 ◽  
Vol 11 (3) ◽  
pp. 467-483
Author(s):  
Aleksandra Pieloch-Babiarz
Keyword(s):  
Stock Exchange ◽  
Pearson Correlation ◽  
Investor Sentiment ◽  
Value Added ◽  
Payout Policy ◽  
Information Criteria ◽  
Managerial Ownership ◽  
Industry Sector ◽  
Warsaw Stock Exchange ◽  
The Impact

Research background: Dividends have been the subject of scientific research for decades. However, many aspects of payout policy are still controversial, and research provides contradictory results. One research area is the impact of the ownership structure on dividend policy. Although many scientific studies on this subject have been conducted, there is still a lack of research on the impact of managerial ownership on adjusting the dividend payout to investor sentiment. It was this research gap that motivated us to investigate the issue. Purpose of the article: The aim of the paper is to evaluate how managerial ownership affects the disposition of companies to adjust their dividend payouts to investor sentiment. Achieving that objective provides stock market investors with additional information and allows for its practical implications as they seek the best investment opportunities. Methods: The main method of investigation is a panel regression model with random effects. This model is used based on the Breusch-Pagan test and the Hausman test, while the information criteria of Akaike, Schwarz, and Hannan-Quinn are also taken into consideration. Additionally, descriptive statistics and the Pearson correlation coefficient are used. The research sample consists of Polish companies from the electromechanical industry sector that are listed on the main market of the Warsaw Stock Exchange (WSE) in the period 2009–2018. Findings & Value added: Our findings reveal that: 1) an increase in dividend premium results in a higher payout in order to cater to investor sentiment; 2) if the manager holds the greatest number of shares, the catering effect weakens. The main contribution of the paper is a new approach to the catering theory of dividends, which includes the impact of managerial ownership.

scholarly journals Motives and effects of the initial public offerings on the Warsaw Stock Exchange

Equilibrium ◽  
2015 ◽  
Vol 10 (2) ◽  
pp. 207
Author(s):  
Tomasz Sosnowski
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Market Value ◽  
Public Offerings ◽  
Warsaw Stock Exchange ◽  
Business Efficiency ◽  
Secondary Shares ◽  
Public Offering

This paper empirically investigates the links between the motives for going public and changes in the market value and efficiency of new stock companies. Using a sample of 200 firms from Warsaw Stock Exchange between 2005 and 2012 I find that the principal purpose of initial public offering is raising additional capital by the company but divestment grounds of initial shareholders are also important. I find evidence that the sale of secondary shares in the initial public offering may be seen as a negative signal at aftermarket performance of the firm. The data reveal that the most adverse long-term changes in the market value and business efficiency are observed for those companies, where in the initial public offering both primary and secondary shares were sold.

scholarly journals IPO UNDERPRICING AND FINANCIAL ANALYSTS’ FORECAST ACCURACY IN POLAND

2015 ◽  
Vol 1 (310) ◽  
Author(s):  
Przemysław Pomykalski ◽  
Maciej Domagalski
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Financial Analysts ◽  
Forecast Accuracy ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Warsaw Stock Exchange

We review the theory and evidence on IPO activity and underpricing focusing on the Warsaw Stock Exchange and confirm that many IPO phenomena in Poland are not stationary. Focusing on the behavioural reasons for underpricing, we investigate the accuracy of analysts’ valuations made prior to initial public offerings. Using a unique set of data, we find a disappointing lack of accuracy, not only in the results of valuations but also in the underlying forecasts of revenues. 

scholarly journals REASSESSING POLISH IPO UNDERPRICING AND UNDERPERFORMANCE

2015 ◽  
Vol 1 (310) ◽  
Author(s):  
Joanna Lizińska ◽  
Leszek Czapiewski
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Warsaw Stock Exchange ◽  
The Difference ◽  
Term Performance ◽  
Long Term Studies

The purpose of the research was to assess the price behavior of initial public offerings (IPO) of equities listed on the Warsaw Stock Exchange from 1996 to 2010. We also aimed to observe IPO underpricing and the underperformance phenomenon with different approaches. Short-term performance was analyzed with raw and adjusted initial returns. For the long-term, abnormal returns were compounded and cumulated. Different methods of outliers detection and ways of minimizing the detrimental effect of outliers were applied. In long-term studies, we also compared the results for the daily, weekly and monthly returns. IPO underpricing and underperformance on the WSE still remains substantial and significant, even accounting for the variety of methods applied. The difference in underpricing between the 1996–2004 and the 2005–2010 sample was insignificant. However, we reported statistically significant and economically important differences in underperformance between both samples.        

scholarly journals Determinants of intellectual capital disclosure in initial public offerings: case of Canadian firms

2016 ◽  
Vol 4 (1) ◽  
pp. 52 ◽  
Author(s):  
Hanen Ghorbel ◽  
Hela Elleuch
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Intellectual Capital ◽  
Voluntary Disclosure ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Multiple Regression Model ◽  
Reporting Practices ◽  
Public Offering

<p>The purpose of this paper is to investigate the determinants of intellectual capital information’s of firms that went through IPO.              Our sample includes 43 firms that IPOs listed in the Toronto Stock Exchange in 2012 of which the prospectuses for the initial public offering are available. Our study, unlike other studies focuses on the issuing prospectuses. The paper applied a disclosure index comprising of 78 items (Bukh and al (2005)) to quantify the amount of information regarding intellectual capital included in the IPO prospectuses of canadian firms. Multiple regression model and Correlation is used. The results revealed that the managerial ownership, the presence of an audit committee and industry are significantly associated with the voluntary disclosure of information about the intellectual capital in prospectuses. While firm size, age, the audit committee’ activity and audit quality do not affect disclosure. The results are interpreted in the light of the increasing importance of disclosing information on intellectual capital to the capital market a in case of IPO and constitute a contribution to the ongoing debate on corporate reporting practices.</p>

scholarly journals Short-run price performance of IPOs and corporate governance practices: Evidence from a frontier market

2018 ◽  
Vol 2 (1) ◽  
pp. 34-42 ◽  
Author(s):  
SMRK Samarakoon ◽  
KLW Perera
Keyword(s):  
Corporate Governance ◽  
Initial Public Offerings ◽  
Negative Impact ◽  
Stock Exchange ◽  
Sri Lankan ◽  
Governance System ◽  
Public Offerings ◽  
Price Performance ◽  
Governance Practices ◽  
Short Run

The short-run price performance of Initial Public Offerings (IPOs) indicates that the prices are often underpriced which is widely documented as a universal phenomenon. Corporate governance refers to the set of systems, principles and processes by which a company is governed. Establishing good corporate governance system in an IPO company makes good decisions which attract more outside investors. Therefore, this study examines whether there is any impact of corporate governance practices on short-run price performance of Sri Lankan IPOs. Study examined 44 fixed price IPOs which were listed on the Colombo Stock Exchange (CSE) during the period of 2003 – January to 2015- December. The study found that Sri Lankan IPOs underprice by 30% on AR, which is statistically significant at 5% level. Further, it found that block holder ownership (ownership concentration), CEO duality and existence of the non-executive directors in the board are positively related to the short-run underpricing, which are statistically significant at 5%. But, the board size has a significant negative impact on underpricing. These relationships are in line with the international literature which confirms that the corporate governance practices have significant impact on short-run price performance of IPOs in Sri Lanka. These findings also support the agency and signaling theories.

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