scholarly journals Waves of the IPO market: The history and emergence

2021 ◽  
Vol 26 (2) ◽  
pp. 158-169
Author(s):  
Vladimir A. BELYAEV
Keyword(s):  
Stock Market ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Investor Sentiment ◽  
Market Dynamics ◽  
Positive Trend ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Public Offerings

Subject. The article considers the phenomenon of clustering in the initial public offering (IPO) market. Objectives. The aim is to perform a critical analysis of literature on the IPO market behavior and determine the optimal moment of company's listing on stock exchange. Methods. The study draws on analytical methods of information gathering and processing, as well as the comparative analysis. Results. The paper summarizes results of works by researchers on the IPO markets clustering, defines criteria for successful listing on stock exchange, unveils a number of factors affecting the market dynamics. It also determines possible ways and indicators to predict the onset of the hot issue market for initial public offerings. Conclusions. Macroeconomic factors and investor sentiment explain the clustering of IPO markets. Given that the waves in this market are of short-term nature, the macroeconomic performance is an inaccurate indicator, when predicting the onset of waves of initial public offerings, as opposed to investor sentiment. Indicators, like the reversal of the stock market from recession to growth, positive market dynamics for three months, and a period of low imputed volatility may serve as indicators of the imminent onset of a wave of initial public offerings. A successful IPO of a company operating in a particular industry may lead to an increase in the number of transactions of similar companies from this industry, provided that the stock market continues to show a positive trend during the period, which is necessary to get ready for an IPO.

The cyclical behavior of the IPO market: History and drivers

2021 ◽  
Vol 14 (2) ◽  
pp. 190-207
Author(s):  
Vladimir A. BELYAEV
Keyword(s):  
Stock Market ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Investor Sentiment ◽  
Market Dynamics ◽  
Positive Trend ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Public Offerings

Subject. The article considers the phenomenon of clustering in the initial public offering (IPO) market. Objectives. The aim is to perform a critical analysis of literature on the IPO market behavior and determine the optimal moment of company's listing on stock exchange. Methods. The study draws on analytical methods of information gathering and processing, as well as the comparative analysis. Results. The paper summarizes results of works by researchers on the IPO markets clustering, defines criteria for successful listing on stock exchange, unveils a number of factors affecting the market dynamics. It also determines possible ways and indicators to predict the onset of the "hot" market for initial public offerings. Conclusions. Macroeconomic factors and investor sentiment explain the clustering of IPO markets. Given that the waves in this market are of short-term nature, the macroeconomic performance is an inaccurate indicator, when predicting the onset of waves of initial public offerings, as opposed to investor sentiment. Indicators, like the reversal of the stock market from recession to growth, positive market dynamics for three months, and a period of low imputed volatility may serve as indicators of the imminent onset of a wave of initial public offerings. A successful IPO of a company operating in a particular industry may lead to an increase in the number of transactions of similar companies from this industry, provided that the stock market continues to show a positive trend during the period, which is necessary to get ready for an IPO.

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

Initial and After-market Performance of SME IPOs in India

2017 ◽  
Vol 18 (6) ◽  
pp. 1536-1551 ◽  
Author(s):  
Sanjay Dhamija ◽  
Ravinder Kumar Arora
Keyword(s):  
Multivariate Analysis ◽  
Stock Market ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Small And Medium Enterprises ◽  
Market Performance ◽  
Stock Exchanges ◽  
Public Offerings ◽  
Low Level ◽  
Medium Enterprises

This article examines the initial and after-market performance of the initial public offerings (IPOs) listed on the recently launched platform for small and medium enterprises (SMEs) by the Bombay Stock Exchange (BSE), Mumbai and the National Stock Exchange (NSE). The study does find evidence of underpricing of IPOs by SMEs in line with other studies internationally. However, the level of underpricing is found to be lower than that of IPOs listed on the main board stock exchanges in India, reported by earlier studies. This may be partially due to the fact that the SME platform is at an infancy stage and has failed to attract investors’ fancy. This is reflected in a low level of oversubscription of SME IPOs at 1.35 times on average. The multivariate analysis identifies the type of offer, size of issue, promoter holding, extent of oversubscription, lead manager prestige and the stock exchange of listing as the key determinants of underpricing of SME IPOs. Post listing, these IPOs have significantly out-performed the benchmark index. The finding is inconsistent with the results of other studies on the main board exchanges where the IPOs, in general, are found to underperform the markets over a significant period of time post listing. This may partly be attributed to thin trading in these stocks and, therefore, to their lower level of liquidity. The findings have significant implications for stock-market regulators, issuers and investors.

effect of underwriter's reputation and auditor's reputation on underpricing in medium companies taking an initial public offering on the Indonesia stock exchange

2021 ◽  
Vol 9 (1) ◽  
pp. 67-78
Author(s):  
P. Lelyta Apti Dhina Apsari ◽  
Gerianta Wirawan Yasa ◽  
Ida Bagus Putra Astika
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Secondary Data ◽  
Negative Influence ◽  
Public Offerings ◽  
Analytical Technique ◽  
Underwriter Reputation ◽  
Public Offering

The purpose of this study is to obtain empirical evidence of the influence of auditor reputation and the effect of underwriter reputation on medium-sized companies that conduct initial public offerings. This research was conducted on 190 companies experiencing underpricing listed on the Indonesia Stock Exchange (IDX) for the 2016-2021 period, the research data used in this study is secondary data. The number of samples analyzed was 130 development board companies and experienced underpricing because companies that met the sample criteria. The analytical technique used in this study was Multiple Linear Regression Analysis. The results of the study prove that underwriter reputation has a negative influence on underpricing of medium-sized companies that conduct initial public offerings. The reputation of the auditor has no effect on the underpricing of medium-sized companies that make this initial public offering on the IDX.

The Variability of IPO Issuance: Evidence from Pakistan Stock Exchange

2020 ◽  
pp. 097215092092919
Author(s):  
Waqas Mehmood ◽  
Rasidah Mohd-Rashid ◽  
Abd Halim Ahmad
Keyword(s):  
Initial Public Offerings ◽  
Robust Regression ◽  
Stock Exchange ◽  
Emerging Market ◽  
Political Stability ◽  
Least Square ◽  
Quadratic Model ◽  
Macroeconomic Factors ◽  
Public Offerings ◽  
Inducing Factors

The present study intends to explore the inducing factors for going public in the emerging market of Pakistan from 2000 to 2018. This study used ordinary least square (OLS), stepwise regression, robust regression and quadratic model to achieve the objectives. The findings revealed that inflation, gross domestic product (GDP) and political stability were positively significant, whereas lending interest rate and underpricing were negatively significant in explaining the number of initial public offerings in Pakistan, as supported by the empirical evidence. Furthermore, the weak macroeconomic factors indicated unfavourable development in the capital market of Pakistan. Concurrently, low confidence for both potential issuers and investors could be seen in fewer IPO activities due to the country’s weak macroeconomic indicators.

The Rise and Fall of the German IPO Market, 1870-1938

2018 ◽  
Vol 59 (1) ◽  
pp. 9-37
Author(s):  
Carsten Burhop ◽  
David Chambers ◽  
Brian Cheffins
Keyword(s):  
World War Ii ◽  
Stock Market ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
World War ◽  
Stock Market Development ◽  
Public Offerings ◽  
German Stock ◽  
The Impact ◽  
German Stock Market

Abstract This study of over 1,000 initial public offerings (IPOs) on the Berlin stock exchange from German unification to the eve of World War II draws attention to the importance of regulation and deepens our understanding of German stock market development. An increasingly exacting regulatory environment from the early 1880s to 1914 made a vital contribution to the higher likelihood of firms going public surviving. In the inhospitable regulatory setting of the 1930s, IPO activity drew to a halt and the development in the German stock market over the preceding decades reversed. As a complement to our analysis of the impact of regulation, we document the increased involvement of leading universal banks (D-banks) in the IPO market over the whole period.

scholarly journals CHALLENGES TO CHINA'S NEW STOCK MARKET FOR SMALL AND MEDIUM-SIZE ENTERPRISES: TRADING PRICE FALLS BELOW THE IPO PRICE

2014 ◽  
Vol 19 (Supplement_1) ◽  
pp. S409-S424 ◽  
Author(s):  
Haifeng Guo ◽  
Tienan Wang ◽  
Yijun Li ◽  
Hung-Gay Fung
Keyword(s):  
Stock Market ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Medium Size ◽  
Probability Models ◽  
Market Returns ◽  
Stock Market Returns ◽  
Public Offerings ◽  
Turnover Ratio ◽  
Non Linear

This study discusses the development of the Growth Enterprise Board (GEB), a part of the Shenzhen Stock Exchange (SZSE), which allows small and medium-size enterprises (SMEs) to raise capital on favourable terms by issuing shares in China. We use all initial public offerings (IPOs) in the GEB market to model the probability of the trading price for new issues that will fall below their IPO price from October 2009 to December 31, 2011. Three probability models (logit, probit and scobit models) are used. The results show that four important factors explain the probability of trading price falling below their IPO price. A high first-day turnover ratio, a small price update, an optimistic stock market, and high average initial returns of other firms prior to an IPO issue all reduce the risk that the trading price will fall below the IPO price. The stock market returns have a non-linear significant effect on that probability. Our results are useful for regulators, underwriters, and issuers in the development of the GEB market.

scholarly journals Decision Analytics for Initial Public Offerings: How Filing Sentiment Influences Stock Market Returns

2021 ◽  
pp. 45-67
Author(s):  
Jonas Krinitz ◽  
Dirk Neumann
Keyword(s):  
Stock Market ◽  
Stock Returns ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Relevant Information ◽  
Market Returns ◽  
Stock Market Returns ◽  
Decision Analytics ◽  
Public Offerings ◽  
Public Offering

AbstractCompanies issuing stocks through an initial public offering (IPO) are obligated to publish relevant information as part of a prospectus. Besides quantitative figures from accounting, this document also contains qualitative information in the form of text. In this chapter, we analyze how sentiment in the prospectus influences future stock returns. In addition, we investigate the impact of pre-IPO sentiment in financial announcements on first-day returns. The results of our empirical analyses using 572 IPOs from US companies suggest a negative link between words linked to uncertainty and future stock market returns for up to 10 trading days. Conversely, we find that uncertainty expressed in pre-IPO announcements is positively linked to first-day stock returns. These insights have implications for research on IPOs by demonstrating that future stock returns are also driven by textual information from the prospectus and assist investors in placing their orders.

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 Clusters of investors around initial public offering

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Margarita Baltakienė ◽  
Kęstutis Baltakys ◽  
Juho Kanniainen ◽  
Dino Pedreschi ◽  
Fabrizio Lillo
Keyword(s):  
Complex Networks ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Markets ◽  
Stock Exchange ◽  
Public Offerings ◽  
Network Method ◽  
Investor Behaviour ◽  
Public Offering ◽  
Helsinki Stock Exchange

Abstract The complex networks approach has been gaining popularity in analysing investor behaviour and stock markets, but within this approach, initial public offerings (IPOs) have barely been explored. We fill this gap in the literature by analysing investor clusters in the first two years after the IPO filing in the Helsinki Stock Exchange by using a statistically validated network method to infer investor links based on the co-occurrences of investors’ trade timing for 69 IPO stocks. Our findings show that a rather large part of statistically similar network structures form in different securities and persist in time for mature and IPO companies. We also find evidence of institutional herding.

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