Investigation Towards the Long-Run Performance of Initial Public Offerings: Evidence From Indonesian Capital Market

Emasari, Lioniva; Tamara, Dewi

doi:10.21512/jafa.v2i2.157

Cited by 4 publications

(2 citation statements)

References 20 publications

(17 reference statements)

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“…CAR and BHAR may be used for calibrating long-run performance. Based on this argument, studies such as Gompers and Lerner (2003), Goergen et al (2007), Ahmad-Zaluki et al (2007), Emasari and Tamara (2010), Agathee et al (2014) and Cheng (2015) deployed both these measures. Aligned with these studies, the employment of both CAR and BHAR in current research is based on the premise that, as CAR methodology measures the returns to investors buying the security on monthly basis and BHAR caters to investors buying and holding the security for a relatively longer duration of time; the findings from these methodologies serve both these investor categories (Ritter, 1991; Kooli and Suret, 2004).…”

Section: Methodsmentioning

confidence: 99%

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The long-run performance of SME IPOs in India: empirical evidence from Indian stock market

Arora

Singh

2020

JABS

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Purpose The purpose of this paper is to study the pattern of long-run performance of small and medium enterprises (SMEs) initial public offerings (IPOs) and examine the firm- and issue-related determinants of long-run performance of SME IPOs in India. Design/methodology/approach The 3 6, 9 and 12 months share returns of Indian SME IPOs is studied using event time methodologies, i.e. buy and hold returns, cumulative abnormal returns and wealth relatives on a sample of 375 SME IPOs issued during February 2012 to May 2018. Additionally, ordinary least square regression has been used to investigate the determinants of long-run performance of SME IPOs on a reduced sample of 104 because of non-availability of price observations. Findings The findings reveal that Indian SME IPOs exhibit long-run overperformance contradicting the international evidences of underperformance, and this overperformance is significantly evident using buy and hold abnormal return (BHAR). Furthermore, based on the divergence of opinion hypothesis, fads theory and windows of opportunity hypothesis, the results reveal that on one hand, issue size and oversubscription negatively affect BHAR, while on the other hand, auditor reputation, underwriter reputation, hot market, underpricing, inverse of issue price, profits prior to listing positively affect long-run performance. However, firm age, firm size, debt equity ratio, volatility and long-run performance computed through BHAR lacks significant relationship. Research limitations/implications The study relied on event time methodology of measuring aftermarket performance of one year because of the limited availability of price offerings. Hence, the study could be extended to analyze aftermarket returns over a period of three to five years to enable reaching the vivid conclusions. Calendar time methodology may also be used to compute abnormal returns. Practical implications The results based on the study provides an implication to the investors by providing them an opportunity to bank higher long-run returns by engaging in active and timely trading strategies. Nevertheless, the results also show that investors should be cautioned while taking investment decisions. Originality/value The study contributes to rising body of international literature by analyzing the larger and recent sample of IPOs issued from 2012 to 2018 listed on SME exchange.

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Section: Methodsmentioning

confidence: 99%

“…Sample selection Authors' calculations may be used for calibrating long-run performance. Based on this argument, studies such asGompers and Lerner (2003),Goergen et al (2007), Ahmad-Zaluki et al (2007,Emasari and Tamara (2010),Agathee et al (2014) and …”

mentioning

confidence: 99%

The long-run performance of SME IPOs in India: empirical evidence from Indian stock market

Arora

Singh

2020

JABS

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The Post-issue Market Performance of Initial Public Offerings: Empirical Evidence from the Malaysian Stock Markets

Yaakub

Sherif

Haniffa

2018

Journal of Emerging Market Finance

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This study examines the long-run performance of the initial public offerings (IPOs) listed in the Malaysian main and alternative ‘Access, Certainty and Efficiency’ (ACE) markets at the economic and sectorial levels. Using event- and calendar-time study methods and monthly data from January 2000 to December 2011, we provide novel evidence on the existence of under performance anomaly in the Malaysian markets and more intensely in the ACE markets. We demonstrate robust evidence on the distinction in sector-specific characteristics from the aggregate market characteristics. While the consumer products and industrial sectors dominate the overall underperformance, the construction, property and technology sectors significantly overperform. The findings are robust to a wide range of other sensitivity checks including parametric and non-parametric tests. JEL Classification: G14, G15, G30, G34, G32, G38

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Underpricing and long-term market performance of initial public offerings in Indonesia: A quantile regression approach

Sasikirono

Sumiati

Indrawati

2018

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Investigation Towards the Long-Run Performance of Initial Public Offerings: Evidence From Indonesian Capital Market

Cited by 4 publications

References 20 publications

The long-run performance of SME IPOs in India: empirical evidence from Indian stock market

The long-run performance of SME IPOs in India: empirical evidence from Indian stock market

The Post-issue Market Performance of Initial Public Offerings: Empirical Evidence from the Malaysian Stock Markets

Underpricing and long-term market performance of initial public offerings in Indonesia: A quantile regression approach

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