The impact of public ownership and share warrants on market performance of IPOs: Evidence from the Indonesian Stock Exchange (IDX)

Madyan, Muhammad; Sasikirono, Nugroho; Sumiati, Sumiati; Meidiaswati, Harlina

doi:10.1016/j.apmrv.2020.05.002

Cited by 7 publications

(8 citation statements)

References 43 publications

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“…In reality, when issuing an IPO, the average share price in the primary market is lower than in the secondary market, which makes a positive initial return, a phenomenon known as underpricing. IPO underpricing attracts investors by generating capital gains (Madyan et al , 2020). The higher the initial return, the more liquid the stock (Hahn et al , 2013; Sapian et al , 2013).…”

Section: Methodsmentioning

confidence: 99%

“…The prospectus provides information about the firms to assist potential investors in making investment decisions. On the other hand, while IPO firms experience a positive return on the first day of their listing (defined as initial return), investing in IPO securities in the long-term may entail some risk; most securities are underperformed (Madyan et al , 2020). Therefore, both investors and issuers pay close attention to IPO aftermarket liquidity following an IPO.…”

Section: Literature Reviewmentioning

confidence: 99%

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Fear of the COVID-19 pandemic and IPO aftermarket liquidity in ASEAN-5

Wigantini

Nainggolan

2023

JABS

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Purpose This study aims to examine the relationship between the fear index and initial public offering (IPO) aftermarket liquidity in ASEAN during the bearish time, the COVID-19 pandemic. Design/methodology/approach This study uses random effect panel regression analysis using two proxies of IPO aftermarket liquidity, namely, volume and turnover, on data of 90 IPO companies in the ASEAN-5 countries over four study periods: 30, 60, 90 and 100 days, after their IPOs. Findings The results indicate that the COVID-19 fear index significantly affects liquidity for all periods. The fear index decreases the stock aftermarket liquidity of ASEAN-5 IPO companies. The findings are consistent with additional tests. Originality/value This study initiates research during the COVID-19 pandemic in ASEAN-5 countries. Furthermore, while the other studies examine the stock performance of existing listed companies, this study focuses exclusively on the liquidity of companies that went public through IPOs in 2020.

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Section: Methodsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Fear of the COVID-19 pandemic and IPO aftermarket liquidity in ASEAN-5

Wigantini

Nainggolan

2023

JABS

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“…The firm characteristics group consists of control variables related to the firm's identity, which includes variables related to its position in the industry, including capital expenditure, compared to the industry (CAPEXSC), and the firm's sales compared to the industry (SALESSIC). In addition, ownership structure has been known to influence market performance (al Farooque et al, 2020;Madyan et al, 2020;Din et al, 2021;) and also included in the model; namely, the percentage of public-owned shares (PUBLIC) and management owned shares (MANOWNER) (Brailsford & Yeoh, 2004). The rest of the firm characteristics groups also includes sector, firm size (Corvino et al, 2019;Chen & Chang, 2020;Kim et al, 2021), competition intensity (Javeed et al, 2020;Juniarti, 2020) and reputation of audit firm (REPUTATION) (Al-ahdal & Hashim, 2022).…”

Section: Model Analysismentioning

confidence: 99%

Moderating Effect of Investment Opportunity in the Association of Market Response and Capital Expenditure

JUNIARTI¹,

KWISTIANUS²,

CHRISTIAWAN³

2022

EPESS

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This study aims to reveal empirical evidence related to the market response to investment spending associated with investment opportunities, considering that investment opportunities is a crucial factor in capital expenditure decisions. This study used data from the Indonesia Stock Exchange in 2016-2021. The sample is only devoted to large-cap companies because this kind of company concerns investors more. The sample does not exclude the business sector, as in previous studies. Following previous research, investment opportunities are measured by Tobin's Q (TQ); a TQ of more than 1 indicates a higher investment opportunity and vice versa. The results show that the market responds negatively to investment spending, and investment opportunities moderate the market's response to investment spending. In addition, it was revealed that the industrial sector strengthened the influence of investment spending on market response. Therefore, management needs to consider investment opportunities before making investment expenditures to avoid getting caught up in overinvesting or under-investing, both of which are detrimental to the company. This study also adds empirical evidence in developing countries where the information gap between management and external parties (markets) is still vast.

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“…How and Howe (2001), Lee et al (2003), Byoun (2004), Klausner et al (2020) and Barth et al (2021) moreover provide empirical evidence regarding the relationship between firm performance and warrants. The deal value is included based on Cumming et al (2014) and Madyan et al (2020), who discusses the role of deal value in explaining IPO returns. And volatility is included based on Supriya Katti, and B.V. Phani (2016), who discuss the role of volatility.…”

Section: Introductionmentioning

confidence: 99%