The Long Run Share Price Performance of Malaysian Initial Public Offerings (IPOs)

Ahmad‐Zaluki, Nurwati A.; Campbell, Kevin; Goodacre, Alan

doi:10.1111/j.1468-5957.2006.00655.x

Cited by 58 publications

(43 citation statements)

References 51 publications

(128 reference statements)

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“…They reported that regarding the economic assumption of a downward sloping demand for shares, that the increase in the share retention percentage by the pre-IPO owners has led to a decrease in the number of available shares for trading, which causes investors to treat the available shares as a scarce commodity,which could lead to an increase in share prices. In the Malaysian IPO market, Ahmad-Zaluki, Campbell and Goodacre (2007) reported an average retention ratio of 76.6% in the whole IPO market, 75.9% in the Main Board, and 77.0% in the Second Board. According to the previous arguments, the current study supports three hypotheses, which are H1, H4 and H5.…”

Section: Resultsmentioning

confidence: 99%

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2018

AAMJAF

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High-quality issuing firms with encouraging inside information regarding their prospect will use signalling to differentiate their issues from low-quality issuing firms and convince prospective investors regarding the value of their firm. Hence, the present study investigates the dominant signals in explaining the initial return in the Malaysian IPO market. The study investigates the following signalling variables: Lock-up period, shareholder retention ratio, underwriter reputation, auditor reputation and board reputation. Moreover, the current study also uses the stepwise regression analysis to know the order of contribution of the signalling variables to the overall model. The results of the regression analysis show that three signals out of five have a significant relationship with the initial return. Furthermore, the stepwise regression shows their order of contribution, where shareholder retention ratio is ranked first, followed by auditor reputation and board reputation. The outcomes of the present study offer new evidence regarding the kind of information that investors should be concerned with when evaluating IPOs and making decisions concerning investment in the Malaysian IPO market.

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Section: Resultsmentioning

confidence: 99%

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2018

AAMJAF

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“…There are several methodologies that could be used to calculate the aftermarket performance of IPOs, and there is no consensus on which of them provides better results. 3 Therefore, we think that it is better to combine several measures as it is specified that results are very sensitive to the chosen performance measure (Ahmad-Zaluki et al, 2007;Purnanadam and Swaminathan, 2004…).…”

Section: Variables Measures and Methodologymentioning

confidence: 99%

“…However, the Malaysian IPO market recorded a significant overperformance of 18.20 percent. Recently, Ahmad-Zaluki et al (2007) also established a positive performance on the Malaysian stock market over the period 1990-2000, when they compiled an equally-weighted portfolio. However, they provide additional results regarding the value-weighted abnormal returns that are on average statistically negative.…”

Section: Introductionmentioning

confidence: 99%

Long-term performance and transfer of shares on the Tunisian Stock Exchange

Gana¹,

Ammari²

2017

gouvernance

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In this study, we examine the long-run performance of a sample of 32 Tunisian crosslisted firms on the Tunisian stock exchange over the period 1992-2006. We use several approaches and conduct robust tests. We observed a strong underperformance of 32 percent over the 36-month period following the listing, when the buy-and-hold abnormal return measure is used. The underperformance is preceded by a positive and significant return of about 20 percent on the first 5 days of listing, which persists for 6 months. We also assess the role of governance variables. The agency theory explains the behaviour of controlling stockholders when transferring stocks. Considering other control variables shows that the hypothesis of the window opportunity explains the underperformance and that the ex-ante uncertainty, measured by the age of the newly listed firm, participate in the deterioration of the long-term stock performance.Basée sur un échantillon de 32 entreprises sur la période 1992-2006, cette étude examine le phénomène de performance à long terme des nouvelles introductions en bourse tunisiennes. Une sous-performance à long terme significativement différente de zéro de l’ordre de 32 pour cent est repérée sur une fenêtre de 36 mois lorsque la méthode d’achat-conservation est appliquée. Cette sous-performance est précédée par une rentabilité positive et significativement différente de zéro de l’ordre de 20 pour cent sur les 5 premiers jours suivant l’introduction en bourse qui persiste jusqu’à 6 mois après. Les variables décrivant le comportement de cession d’actions par les actionnaires de contrôle expliquent de façon significative la rentabilité à long terme et penchent en faveur de la théorie d’agence. Par ailleurs, les résultats sont conformes à l’hypothèse de la « fenêtre d’opportunité ». L’incertitude ex-ante décrivant l’entreprise candidate participe, pour sa part, à la détérioration de la performance boursière à long terme

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“…Similarly, mixed findings have been documented for long-run IPO performance, with on the one hand, findings of underperformance reported in the developed countries, like the US and UK (Espenlaub, Gregory, & Tonks, 2000;Gompers & Lerner, 2003;T. Loughran & Ritter, 1995); Ritter (1991); and, on the other hand, evidences of overperformance in the developing countries like Malaysia, Singapore and Turkey (Ahmad-Zaluki, Campbell, & Goodacre, 2007;Banu Durukan, 2002;P. Lee, S. Taylor, & T. Walter, 1996b).…”

Section: Introductionmentioning

confidence: 98%

The Short and Long-Run Performance of Sharia-Compliant Initial Public Offerings (IPOs) in the Emerging Market: Evidence from the Saudi Arabia Share Market

Kamaludin¹,

Zakaria

2019

J. Rev. Global Econ.

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This study examines the short-and long-run share performance of 40 Sharia-compliant IPO companies listed on the Saudi Arabia Stock Exchange (Tadawul) from 1 st January 2000 to 31 st August 2017. This study employs both market-adjusted initial returns and buy-and-hold abnormal return to measure the share performance of IPOs. First, the analysis shows that Sharia-compliant IPOs are underpricing with abnormal initial returns of 79.23%. Second, the results suggest that investors could earn positive and significant market-adjusted BHAR of 14.67% if they held IPO shares over the eighteen-month period following the listing date when EWI is used as a market benchmark. This study also finds that IPO companies outperformed the VWI although the results are insignificant. The findings on the long-run overperformance contribute to the IPO literature on long-run performance of Sharia-compliant IPOs. The present study would benefit foreign investors and market regulators who are trying to understand the market behaviour in an emerging market.

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The Long Run Share Price Performance of Malaysian Initial Public Offerings (IPOs)

Cited by 58 publications

References 51 publications

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Long-term performance and transfer of shares on the Tunisian Stock Exchange

The Short and Long-Run Performance of Sharia-Compliant Initial Public Offerings (IPOs) in the Emerging Market: Evidence from the Saudi Arabia Share Market

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