scholarly journals Exploring the Existence of Short-run Initial Public Offering (IPO) Underpricing at Three Different Stock Exchange Markets in Japan

2018 ◽  
Vol 8 (1) ◽  
pp. 253
Author(s):  
Yoshiki Shimizu ◽  
Hideki Takei
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Statistical Significance ◽  
Research Question ◽  
Abnormal Returns ◽  
Efficient Market Hypothesis ◽  
Ipo Underpricing ◽  
Japanese Market ◽  
Short Run ◽  
Exchange Markets

This study conducted the examination of the short-run performance of IPO stocks in the Japanese market by measuring daily AAR/CAAR of sample IPO stocks.. The study did so, in order to detect the positive initial abnormal return of sample IPO stocks as well as the short-run IPO underpricing that was observed by Ibbotson (1975) and McDonald and Fisher (1972) in the US market, and Chang (2011) in the Taiwanese market. The finding was that unlike findings in prior research, this study did not discover the positive initial abnormal returns for sample IPO firms in the Japanese market on the event day with statistical significance. Thereby, the short-run IPO underpricing did not occur in the Japanese market and it is inferred that offer prices of IPOs in the Japanese market are priced rationally, reflecting all available pieces of information at the time of offering. The implication of this finding for Efficient Market Hypothesis is that in the short-run, market efficiency holds well for the Japanese market. Findings from the examination on short-run performance of IPO stocks in the Japanese market has enabled this study to answer the research question: Does short-run IPO underpricing exist at stock exchange markets in Japan? The answer is, the short-run IPO underpricing did not exist. 

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 Prospectus disclosure and the stock market performance of initial public offerings (IPOs): the case of Thailand

2016 ◽  
Vol 13 (4) ◽  
pp. 160-179
Author(s):  
Kulabutr Komenkul ◽  
Mohamed Sherif ◽  
Bing Xu
Keyword(s):  
Stock Returns ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Abnormal Return ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Jel Classification ◽  
Ipo Underpricing ◽  
Stock Market Performance ◽  
Wide Range

This study examines if the prospectus disclosure of the motives for an initial public offering (IPO) explains the long-run performance of equity issuers using hand-collected data for 245 IPOs from the Stock Exchange of Thailand (SET), and also the Market for Alternative Investments (MAI), in the 12-year period between 2001 and 2012. The stock returns of the IPOs were investigated using cumulative abnormal return (CAR) and buy-and-hold abnormal return (BHAR). The authors find a significant impact for the level of use-of-proceeds disclosure on IPO underpricing, and further that the ex-ante uncertainty and signalling hypotheses explain the IPO underpricing phenomenon in the Thai IPO market. Furthermore, Thai firms citing investment needs show significant positive abnormal returns after the offering, but issuers that state general corporate purposes and debt payments motives underperform. The authors provide evidence that the offering size and bull-market conditions significantly affect the IPO pricing and the strategic disclosure of information in the prospectus. Our results are robust, having been subjected to a wide range of sensitivity checks. Keywords: Prospectus disclosure, IPO performance, Thailand. JEL Classification: G14, G30, G32

scholarly journals Review of short-run performance of initial public offerings in Australia

2021 ◽  
Vol 18 (2) ◽  
pp. 188-200
Author(s):  
Lutfa Tilat Ferdous ◽  
Niroshani Parahara Withanalage ◽  
Abyan Amirah Qamaruz Zaman
Keyword(s):  
Regression Analysis ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Secondary Market ◽  
Publicly Traded ◽  
Ipo Underpricing ◽  
Secondary Markets ◽  
Public Offerings ◽  
Short Run ◽  
Total Market

This study investigates the short-run performance of initial public offerings in Australia. Based on sources from the Morningstar DatAnalysis database, we analyzed 211 Australian publicly traded initial public offerings (IPO) listed on the Australian stock exchange between January 2011 and December 2015 using multiple regression analysis with dummies to represent industry and listing year. According to our analysis, total market return indicates an IPO underpricing phenomenon whereas secondary market shows an overpricing scenario. Moreover, this analysis supports the contention that short-run performance fluctuations were based on the listing year and industry settings. This study contributes to the literature by analysing the short-run performance of both the primary and secondary markets

scholarly journals The Effect of Dividend Initiation on Short-run Return in Indonesia: An Event Study with Propensity Score Matching Approach

2016 ◽  
Vol 11 (12) ◽  
pp. 207
Author(s):  
Bambang Sugeng
Keyword(s):  
Propensity Score ◽  
Propensity Score Matching ◽  
Event Study ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Traditional Approach ◽  
Abnormal Returns ◽  
Listed Firms ◽  
Study Approach ◽  
Short Run

<p>Dividend initiation policy offers a relatively unique practical and conceptual characteristics compared to those of regular dividend. This study aims at investigating whether initial dividend policy of Indonesian firms affects short-run stock return, while further exploring the implementation of a new event study approach, <em>propensity score matching</em>, as an experimental-like design. This approach is based on actual rather than estimated abnormal return commonly used in traditional approach. Applying this new approach, this study found no significant abnormal returns around dividend initiation announcement by firms listed in Indonesia Stock Exchange. The findings imply that the dividend initiation behavior of Indonesian firms is proved not fully to follow the theoretical framework of signaling model, a dividend model which is basically developed primarily based on regular dividend behavior. The results partly contradict those findings mostly resulted from researchs conducted in advanced market context but seem to support contextuality argument of dividend policy. From methodological perspective, this study identified that the use of propensity score matching approach needs a large number of firms from which control firms are selected, accordingly the study conducted in market with limited number of listed firms such as in Indonesia could generates selection problem of control firms that optimally match treated firms.</p>

The Effect Of Geographic Dispersion On The Initial And Long-Run IPO Performance

2017 ◽  
Vol 41 (7) ◽  
pp. 869-897 ◽  
Author(s):  
Ozgur Ozdemir
Keyword(s):  
Initial Public Offering ◽  
Abnormal Returns ◽  
Geographic Dispersion ◽  
Ipo Performance ◽  
Geographically Dispersed ◽  
Long Run ◽  
Significant Difference ◽  
Short Run ◽  
Restaurant Firms ◽  
Public Offering

This study examines the effect of geographic dispersion on the short-run and long-run initial public offering (IPO) performance of restaurant firms. Sample of the study consists of 103 restaurant IPOs conducted between 1981 and 2011. The study finds that being geographically dispersed or concentrated in a small area does not lead to a significant difference in the initial returns of restaurant IPOs. Yet the analysis shows that restaurant firms with geographically dispersed operations have significantly higher long-run returns in the post-IPO period compared with their local counterparts. This is evidenced by the significantly larger cumulative abnormal returns for geographically dispersed restaurant firms in the post-IPO period.

scholarly journals ANALISIS PENGARUH HARGA SAHAM PERDANA TERHADAP ABNORMAL RETURN YANG DITERIMA INVESTOR STUDI PADA BURSA EFEK INDONESIA

2019 ◽  
Author(s):  
Afriyeni Afriyeni ◽  
Doni Marlius
Keyword(s):  
Initial Public Offering ◽  
Abnormal Return ◽  
Sampling Method ◽  
Stock Exchange ◽  
Alternative Hypothesis ◽  
Abnormal Returns ◽  
Sampling Technique ◽  
Real Rate ◽  
Average Abnormal Return ◽  
Public Offering

In this research uses empirical design, the goal is to determine how the effect of the initial public offering of the abnormal return earned by investors on the Stock Exchange went public in the period 2008-2010. This study is a population of all shares of listed companies on the Stock Exchange. The sampling technique used was purposive sampling method based sampling method with a consideration of certain criteria in order to obtain as many as 26 samples. Based on the statistical test results, it can be concluded that the initial public offering and a significant positive effect on abnormal returns earned by investors on the Stock Exchange, which can be seen from the alternative hypothesis is accepted. This means that the average abnormal return earned by investors on the Stock Exchange for the first six weeks of the companies that go public as many as 26 companies will be greater than 0 (zero) or positive. Overall average abnormal return earned by investors is positive, so that the average IPO price of 26 companies that went public in the year 2008 to 2010 is considered low (undervalued) or if the real rate of return higher than the return that expected.

IPO underpricing and long-term performance in China: the perspective of price limit policy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yuxin Wang ◽  
Guanying Wang
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Ipo Underpricing ◽  
Content Type ◽  
Price Limit ◽  
Good Policy ◽  
Public Offering ◽  
Long Term Performance ◽  
Term Performance

PurposeThe purpose of this paper is to explore how the price limit policy implemented in 2014 affects initial public offering (IPO) underpricing and long-term performance in China.Design/methodology/approachThe data are the IPOs from Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE) between 2004 and 2018. The data are firstly divided into the IPOs before the price limit policy and the IPOs after the price limit policy according to the time of issuance. Then the two groups are divided into 4 subsamples according to the market blocks and the P/E ratio. The authors use multiple regression models to explore the effect of price limit policy in each subsample.FindingsThe first-day price limit system for IPOs is similar to the upward fuse mechanism, the purpose of which is to suppress IPO underpricing. However, this study finds that the policy does not suppress IPO underpricing, but increases the underpricing rate in all subsamples. Besides, the long-term performance in each subsample is different from each other. Main Board stocks’ long-term performance is worse after the policy. The policy makes Small and Medium Enterprise Board (SME Board) and Growth Enterprise Market Board (GEM Board) stocks with high P/E ratios perform better in the long term. For SME Board and GEM Board stocks with low P/E ratios, the policy makes no significant effect.Practical implicationsGood policy intentions may sometimes lead to counterproductive effects. However, since the long-term performance of each subsample is different, it is difficult to judge whether the policy should continue to be implemented or cancelled. Implementing different policies for different subsamples may be a better way to solve this problem.Originality/valueThis paper contributes to the study of IPO underpricing and long-term performance from the perspective of price limit policy.

scholarly journals The Influence of Intellectual Capital Disclosure, Economic Value Added Analysis, and Inclusion of Warrants on the Level of Underpricing in Shares

2019 ◽  
Vol 28 (3) ◽  
pp. 1682
Author(s):  
Muhammad Faisal ◽  
Gerianta Wirawan Yasa
Keyword(s):  
Initial Public Offering ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Sampling Technique ◽  
Economic Value Added ◽  
Ipo Underpricing ◽  
Company Value ◽  
Public Offering

The underpricing phenomenon often occurs when a company conducts an initial public offering or commonly known as IPO (Initial Public Offering). This condition causes stakeholders receive not enough information for assessing the company value. This study aims to analyze the effect of intellectual capital disclosure, economic value added, and inclusion of warrants on the level of underpricing of shares. This research was conducted in all companies that conducted IPOs on the Indonesia Stock Exchange (IDX) in the period 2012-2014. The number of samples taken was 60 companies, with a purposive sampling technique. The data analysis technique used is multiple linear regression. The results of testing the partial test hypotheses found that intellectual capital disclosure variables negatively affect the level of underpricing, while the variables of warrants participation have a positive effect on the level of underpricing. The economic value added variable does not affect the level of underpricing. Keywords : Initial Public Offering (IPO), Underpricing, Economic value added, Warrant.

scholarly journals What Impacts IPO Underpricing? Evidence from Dhaka Stock Exchange

2018 ◽  
Vol 13 (3) ◽  
pp. 88 ◽  
Author(s):  
Maria Hossain Sochi ◽  
Raisul Islam
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Empirical Studies ◽  
Time Frame ◽  
Agency Cost ◽  
Least Square ◽  
Ipo Underpricing ◽  
Ordinary Least Square ◽  
Independent Variables ◽  
Public Offering

Initial Public Offering (IPO) is an important and widely popular research topic among many researchers in finance discipline. This study is prepared to identify the connection among various empirical studies and theories regarding underpricing of IPO in the stock market of Bangladesh. We have chosen the time frame of June 2011 to June 2016 at DSE to conduct the research. In this study, ordinary least square (OLS) regression method is used to identify in what extent the dependent and the independent variables are related in the level of underpricing. The results of the study disclose that oversubscription rate, offer size have substantial influence in IPO underpricing at DSE. On the other hand, offer time and size of the firm do not have significant influence on the level of underpricing. These variables are very significant and play important roles with the level of underpricing at DSE and it shows relation to signaling theory, information asymmetry theory and agency cost theory.

scholarly journals Board governance and IPO performance in the short-run and long-run

2008 ◽  
Vol 6 (Special Issue 1) ◽  
pp. 15-34
Author(s):  
Raymond da Silva Rosa ◽  
H.Y. Izan ◽  
Michelle Ching- Yi Lin ◽  
Suzanne Ching- Fang Lin ◽  
◽  
...  
Keyword(s):  
Initial Public Offering ◽  
Best Practice ◽  
Resource Dependence ◽  
Stock Exchange ◽  
Resource Dependence Theory ◽  
Board Governance ◽  
Board Size ◽  
Practice Recommendations ◽  
Long Run ◽  
Short Run

In light of the best practice recommendations released by the Australian Stock Exchange (ASX) in March 2003, this study tests the relationship between initial public offering (IPO) firm performance and board governance quality, captured by board size, board leadership, board composition, and director’s share ownership. Based on a sample of Australian IPO firms that lodged prospectuses with ASX between 1994 and 1999, we do not find evidence that links underpricing to board structures at the time of IPO. IPO firms’ board structures are insignificant in explaining the level of IPO underpricing, and board size is the only board governance variable significant in explaining long-run after market performance, after controlling for the size of the firm. That is, IPO firms with larger boards at the time of issuance perform better in the long-run, consistent with the resource dependence theory. Thus, we conclude that ASX’s best practice recommendations are likely to distort the market-driven practice salready in place, and our findings lead us to question the role played by the board of directors in signalling firm quality.

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