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.

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 DETERMINANTS FACTOR ANALYSYS OF UNDERPRICING ON INITIAL PUBLIC OFFERING AT INDONESIA STOCK EXCHANGE

2017 ◽  
Vol 15 (1) ◽  
pp. 21
Author(s):  
Ardhiani Fadila ◽  
Muhammad Zilal Hamzah ◽  
Pardomuan Sihombing
Keyword(s):  
Initial Public Offering ◽  
Capital Market ◽  
Stock Prices ◽  
Stock Exchange ◽  
Financial Information ◽  
Financial Data ◽  
Economic Data ◽  
Independent Variables ◽  
Underwriter Reputation ◽  
Public Offering

Under pricing is phenomenon of IPO which often happened in capital market and have been examined by researchers in many countries. This study aims to analyze the determinant factors of under pricing. This data is collected from some stocks at Indonesia Stock Exchange, especial for non-financial sector company which performed initial public offering period 2010-2014.<br />The samples used were 75 companies that were taken through purposive sampling. Independent variables in this study are Macro Economic Data, Financial Data and Non-Financial Data.<br />The result shows that all independent variables simultaneously have a significance correlation toward under pricing. Its prove that the rate of inflation has effect on determining IPOs price which impact on profit companies also stock prices. While non-financial information (proxies by underwriter reputation) has a negative correlation toward the degree of under pricing. Its mean that a good performance of underwriter can decrease the IPOs under pricing.

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 Intellectual Capital Disclosures in IPO Prospectuses of Indian Companies

2015 ◽  
Vol 2 (1) ◽  
pp. 40-51 ◽  
Author(s):  
Meena Bhatia ◽  
Bhawna Agarwal
Keyword(s):  
Initial Public Offering ◽  
Intellectual Capital ◽  
Knowledge Economy ◽  
Stock Exchange ◽  
Multiple Regression Model ◽  
Board Independence ◽  
Managerial Ownership ◽  
Services Sector ◽  
Independent Variables ◽  
Public Offering

The study is based on companies that went through IPO on the Bombay Stock Exchange (BSE) and/or National Stock Exchange in the period 2011-2012. The paper applied a disclosure index comprising of 78 items to quantify the amount of information regarding intellectual capital included in the IPO prospectuses of Indian companies. The sum of disclosed score is divided by 78 to arrive at the index. For disclosure index content analysis is used. Multiple regression model and Correlation is used to examine the significance and association between disclosure index with independent variables. The main objective of this paper is to study the extent of intellectual capital disclosures in Initial Public offering (IPO) prospectus of Indian companies and also to examine the factors that influence the intellectual capital disclosure. The regression results reveal that of all the independent variables studied i.e. Board size Board independence Size Age Leverage Managerial ownership and Industry differences; Intellectual capital disclosure is influenced by industry differences. India is considered as knowledge economy and has highest contribution in gross domestic product from services sector wherein intellectual capital plays the most important role. As regards intellectual capital the studies have been insufficient. To our knowledge this is the first research on intellectual capital disclosures in IPO prospectuses of Indian companies.DOI: http://dx.doi.org/10.3126/ijssm.v2i1.11685     Int. J. Soc. Sci. Manage. Vol-2, issue-1: 40-51 

scholarly journals INFORMASI AKUNTANSI DAN NON AKUNTANSI PADA FENOMENA UNDERPRICING YANG TERJADI SAAT PENAWARAN UMUM SAHAM PERDANA PADA PERUSAHAAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

2017 ◽  
Vol 18 (3) ◽  
Author(s):  
Lydia Kurniawan
Keyword(s):  
Information Asymmetry ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Stock Exchanges ◽  
Ipo Underpricing ◽  
Return On Assets ◽  
True Value ◽  
Initial Return ◽  
The World ◽  
Public Offering

Abstract: In order to expand their business in several ways, for example companies can offer their shares to the general public. Underpricing is a phenomenon that often appears and is experienced by companies that conduct an Initial Public Offering on the various stock exchanges in the world, where the IPO price is set lower than the true value of the company. Underpriced shares often occur because of information asymmetry or inequality of information that occurs in the group of investors who have information and a group of investors who do not have the information about the prospects of the issuer company. This study examined whether the age of the firm, firm size, and return on assets (ROA) affect the level of IPO underpricing on the company at the Indonesian Stock Exchange. This study was measured by Initial Return underpricing. The objects in this study are 32 companies that did the initial public offering in 2002 to 2004 at the Indonesia Stock Exchange and experienced under pricing . Conclusions from the study indicate that the companies age and their size variables are not shown to affect the dependent variable Underpricing, while the variable Return on Assets (ROA) Under pricing are shown to affect the dependent variable at a significant level of 5%.

scholarly journals PENGARUH LIKUDITAS DAN NILAI TUKAR TERHADAP HARGA SAHAM SETELAH IPO PADA PERUSAHAAN YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2009 SAMPAI TAHUN 2014

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Denny Andriana
Keyword(s):  
Exchange Rate ◽  
Initial Public Offering ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Statistical Hypothesis ◽  
Independent Variables ◽  
Us Dollar ◽  
Public Offering ◽  
Variable Exchange

Abstract. This study aims to determine the effect of corporate liquidity and exchange rate on stock prices after conducting IPO (Initial Public Offering) in Indonesia Stock Exchange. The study was conducted by taking 78 samples of companies whose IPO in 2009-2014. The analytical method used is multiple linear regression that compares the statistical hypothesis with the results. Regression results show the liquidity variables affect the stock price after the IPO with a positive correlation direction. While the variable exchange rate of Rupiah to US Dollar does not affect the stock price after IPO with negative correlation direction. Tests together (simultaneously) show the independent variables of liquidity and exchange rate as a whole affect the dependent variable or stock price after the IPO Keywords: Liquidity, Exchange Rate, Stock Price Abstrak. Penelitian ini bertujuan untuk mengetahui pengaruh likuiditas perusahaan dan nilai tukar terhadap harga saham setelah melakukan IPO (Initial Public Offering) di Bursa Efek Indonesia. Penelitian dilakukan dengan mengambil 78 sampel perusahaan yang IPO di tahun 2009-2014. Metode analisis yang digunakan adalah regresi linier berganda yang membandingkan hipotesis statistik dengan hasil. Hasil regresi menunjukan variabel likuiditas berpengaruh terhadap harga saham setelah IPO dengan arah korelasi positif. Sedangkan variabel nilai tukar Rupiah terhadap Dolar AS tidak berpengaruh terhadap harga saham setelah IPO dengan arah korelasi negatif. Uji bersama-sama (secara simultan) menunjukan variabel independen yaitu likuiditas dan nilai tukar secara keseluruhan mempengaruhi variabel dependen atau harga saham setelah IPO Kata Kunci: Likuiditas, Nilai Tukar, Harga Saham

scholarly journals Model hubungan informasi non keuangan dengan initial return dan return saham 7 hari

2019 ◽  
Vol 2 (2) ◽  
pp. 107-116
Author(s):  
Basuki Toto Rahmanto
Keyword(s):  
Initial Public Offering ◽  
Stock Prices ◽  
Design Research ◽  
Stock Exchange ◽  
Secondary Market ◽  
Independent Variables ◽  
Initial Return ◽  
Data Ownership ◽  
Data Source ◽  
Public Offering

This study aims to determine the factors that influence the initial return and return of shares after 7 days after the initial public offering of companies that went public on the Indonesia Stock Exchange in the period 2011-2015. This research is causal design research. The data source of this research is a list of listed companies that made an initial public offering in 2011-2015 on the Indonesia Stock Exchange and a list of initial stock prices, stock prices on the first day and stock prices 7 working days after the IPO on the secondary market. As well as auditor reputation data, ownership retention, and company age. The results of the simultaneous regression analysis show that all the independent variables together affect the initial return.

scholarly journals The Effect of Information Asimmetry On Earnings Management In Companies That Conduct An Initial Public Offering (IPO) On The Indonesia Stock Exchange (IDX)

2019 ◽  
Vol 16 (4) ◽  
pp. 222-236
Author(s):  
Riski Hernando
Keyword(s):  
Earnings Management ◽  
Hypothesis Testing ◽  
Information Asymmetry ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Test Results ◽  
Analysis Techniques ◽  
Independent Variables ◽  
Public Offering

This study aims: to determine the effect of information asymmetry on Earnings Management in companies that carry out initial public offering on the Indonesia Stock Exchange in the period before go public, when go public, or after go public.Design and methodology: Sampling in this study is to use the purposive sampling method, where the company to be studied must certain criteria. The number of companies used as research samples based on predetermined criteria is 142 companies. The population in this study are banking/financial companies, service companies, and trading companies that made initial public offering on the Indonesia Stock Exchange (IDX). Analysis techniques are carried out with simple linear regression analysis techniques. The analytical method uses descriptive statistics, data quality tests, and hypothesis testing. Test the quality of the data in the form of classic assumption test which includes: normality test, multicollinearity test, heteroscedasticity test and autocorrelation test. Hypothesis testing uses the t test to test the coefficient partially with a significant level of 5%.Results: The test results prove that information asymmetry has a significant effect on earnings management during and after conducting an IPO, but when go public does not pass the heteroscedasticity test. The test results also prove that information asymmetry has no significant effect on earnings management before the IPO. Regression results indicate that the coefficient of determination possessed by the variables observed before, during, and after the IPO are respectively R-square= 0.039, 0.121, and 0.221. This means that the influence of the independent variables on the dependent variable is 3.9%, 12.1% and 22.1%.Originality/value: the addition of research variables to the independent variables can be done considering there are about 96.1%, 87.9%, and 77.9% influenced by other variables not included in this research model.Keywords: Asimmetry Information, Earnings Management, Initial Public Offering (IPO).

Determinants of heterogeneity in investors' opinions on IPO valuation: evidence from the Pakistan stock market

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Waqas Mehmood ◽  
Rasidah Mohd-Rashid ◽  
Norliza Che-Yahya ◽  
Chui Zi Ong
Keyword(s):  
Initial Public Offering ◽  
Stock Exchange ◽  
Least Square Method ◽  
Political Stability ◽  
Least Square ◽  
Content Type ◽  
Pricing Mechanism ◽  
Price Range ◽  
Public Offering ◽  
High Level

PurposeThis study investigated the effect of pricing mechanism and oversubscription on the heterogeneity of investors' opinions on initial public offering (IPO) valuation.Design/methodology/approachBesides the ordinary least square method, this study incorporated robust least square, stepwise least square and quantile regression methods to investigate the aftermarket behaviour of investors using the price range on the first day of trading of 82 IPOs listed on the Pakistan stock exchange.FindingsThe aftermarket behaviour of investors was found to be significantly influenced by the pricing mechanism, oversubscription, financial leverage, political stability and the risk of IPO, whereas control of corruption showed an insignificant impact. Concurrently, the findings showed that pricing mechanism and oversubscription played a crucial role in determining the intensity of investors' heterogeneous opinions at high levels of significance.Originality/valuePricing mechanism and oversubscription not only signal the quality of IPOs but also provide an important means for reducing the information asymmetry associated with new listings. Based on the literature review, it was found that both the pricing mechanism and oversubscription have yet to be explored in investigating the aftermarket behaviour of investors using the price range in the Pakistan IPO market. This study suggests that book building pricing mechanism and oversubscription are associated with lower heterogeneity in investors’ opinions at a high level of significance.

Sign in / Sign up

Export Citation Format

Share Document