Private placements and rights issues in Singapore

Tan, Ruth; Chng, Pheng-Lui; Tong, Yen H.

doi:10.1016/s0927-538x(01)00028-2

Cited by 62 publications

(55 citation statements)

References 28 publications

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“…Finally, we control for each issuance's proceeds/total assets to control for the magnitude of an equity issuance. According to Tan et al (2002), large equity issuances are expected to be positively related with SEO announcement stock returns, since it is more likely that firms issue large equity when there are positive investment opportunities available.…”

Section: Methodsmentioning

confidence: 99%

Bank regulation, financial crisis, and the announcement effects of seasoned equity offerings of US commercial banks

Hong

Siganos

et al. 2016

Journal of Financial Stability

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(2016) Bank regulation, financial crisis, and the announcement effects of seasoned equity offerings of US commercial banks. Journal of Financial Stability, 25, pp. 37-46. (doi:10.1016Stability, 25, pp. 37-46. (doi:10. /j.jfs.2016 This is the author's final accepted version.There may be differences between this version and the published version. You are advised to consult the publisher's version if you wish to cite from it.http://eprints.gla.ac.uk/120226/ This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. Bank Regulation, Financial Crisis, and the Announcement Effects of Seasoned Equity Offerings of US Commercial BanksHui * Corresdonding author Highlight for ReviewThe paper investigates that the cumulative abnormal stock returns around seasonal equity offerings (SEO) announcement for banks vs. nonbanks using a sample of U.S. commercial banks and non-banks between 1982 and 2012. Our find that the SEO announcement effects are significantly higher than those of non-banks, consistent with the hypothesis that bank regulation reduces reduce the likelihood that bank SEOs signal overpriced equity. In addition, the propensity score matching-based difference-in-difference analysis indicates that this difference is reduced during the 2007-09 global financial crisis period and increased after the passage of the Dodd-Frank Act in 2010. Our results have important implications on the impact of bank regulation and financial crisis on bank SEOs.Our study contributes to the literature in several ways. We first contribute to the debate over whether bank regulation could boost investor confidence and reduce firm equity issuing costs. Our results that banks have higher SEO announcement effects confirm Slovin et al.'s (1991) suggestion that banks are frequent equity issuers due to the low issuing costs. Our results also complement Smith's (1986) findings that utility firms, which operate in a highly regulated industry, also experience relatively higher SEO announcement effects than their less regulated counterparts. Our study offers credence to the theory that regulation could influence investors' perception of information asymmetry between investors and firm managers. To highlight the significance of regulation, we further focus on recent events, such as the financial crisis and the passage of the Dodd-Frank Act, to explore their impact on the difference between bank and non-bank SEO announcement stock returns. We find that issuing costs increase during the financial crisis period and decrease when government regulation tightens.Our paper also extends the work of Polonchek et al. (1989), who find that the mean abnormal r...

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Section: Methodsmentioning

confidence: 99%

Bank regulation, financial crisis, and the announcement effects of seasoned equity offerings of US commercial banks

Hong

Siganos

et al. 2016

Journal of Financial Stability

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“…In contrast to these findings, a positive abnormal return for right issue announcements has been observed in Japan (Kang and Stulz, 1996), Greece (Tsangarakis, 1996) and Singapore (Tan et al, 2002). Numerous studies on emerging markets also reveal significant positive abnormal returns on announcement of right issues i.e.…”

Section: Introductionmentioning

confidence: 93%

Announcement Effects of Seasoned Equity Offerings in China

Shahid¹,

Xia²,

Mahmood³

et al. 2010

IJEF

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By taking a longer period (1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008) this study examines the stock price reaction to the announcement of different equity issues in China. Initially, the study documents the announcement effects of Right issues and Public Offerings (SEOs). Secondly, it adds to the previous literature by keeping in view three successive announcement dates for SEOs as event dates i.e. Board of directors meeting date (BOD), shareholders' meeting date and announcement date to public. Findings suggest that market react positively to the announcement of right offerings while SEOs convey negative signals to market. Consistent with earlier studies on Right issues announcement effects around different event dates, SEOs price effects are also more significantly negative around BOD date. For shareholders' meeting date less significant response is observed, while around announcement date again more negative significant returns are observed, more than shareholders' meeting date but less than BOD meeting date.

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“…For example, negative reactions have been documented in the US (Mikkelson and Partch, 1986;Eckbo and Masulis, 1992), the UK (Slovin et al, 2000) and New Zealand (Marsden, 2000), but positive reactions have been documented in China (Wang et al, 2006;Xia et al, 2014), Greece (Tsangarakis, 1996) and Singapore (Tan et al, 2002). In Kuwait, Alhashel *Corresponding author.…”

Section: Introductionmentioning

confidence: 99%

Drivers of price reaction to rights issue announcements in the Kuwait Stock Exchange

Alhashel

Alojayan

2015

Applied Economics

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This study examines the drivers behind stock price reactions to announcements of rights issues by firms listed on the Kuwaiti Stock Exchange for the period 2003-2013. We find higher cumulative abnormal returns for firms that undertake larger issues, with the issue size reflecting the availability of favourable investment opportunities and their potential positive impact on firms' earnings. We also document a positive price reaction in firms that are affiliated with a family group. We interpret this as evidence that the proceeds of the rights offering would be employed effectively when the firm is controlled by a family firm. No evidence was found for the price pressure and pricing effects.

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Private placements and rights issues in Singapore

Cited by 62 publications

References 28 publications

Bank regulation, financial crisis, and the announcement effects of seasoned equity offerings of US commercial banks

Bank regulation, financial crisis, and the announcement effects of seasoned equity offerings of US commercial banks

Announcement Effects of Seasoned Equity Offerings in China

Drivers of price reaction to rights issue announcements in the Kuwait Stock Exchange

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