Analysis of Malaysian Ipo Market Price Performance
Analysis of Malaysian IPO market price performance by Lee Kai Liang.
Abstract (Summary) An Initial Public Offering (IPO) is the first sale of a company’s common stocks to investors on a public stock exchange. It is widely believed that IPO’s price appears to have relationship with its listing market price. Investor’s general perception shows IPO is under pricing and likely to obtain capital gain if immediately sell their shares in secondary market on the first day of IPO’s trading. However, there are cases whereby first day closing price is same or lower that IPO price. In this case, investors to understand the IPO pricing performance in short and longer terms. This research will examine the relationship of IPO offer price with its first day closing market price and longer term of first year closing market price and expected dividend to its first year closing market price. This study covers for IPO’s listed from January 2002 to October 2006 in Bursa Malaysia. The Paired Samples T-test and Multiple Regression techniques are conducted in this research. The analysis indicated a positive and significant relationship between IPO Price, First Day Closing Price and First Year Closing Price. The results show that First Day Closing is averagely 22.41 percent higher than IPO Price and First Year Closing Price is averagely 20.25 percent higher that IPO Price in five years period. This finding supports the IPO under pricing theories made by previous researches that could be applied in Bursa Malaysia as well. The regression analysis shows First Year Closing Price has significant influence from First Day Closing Price but only marginal influence from Expected Dividend. Indexing (Document Details) Author: Lee, Kai Liang. Supervisor(s): Assoc. Prof. Dr. R. Ravindran. Faculty: Graduate School. Publisher: Universiti Tun Abdul Razak. Uncontrolled Initial Public Offering (IPO).
Keywords: Public stock exchange. First Day Closing Price. First Year Closing Price. Bursa Malaysia.
Abstract (Summary) An Initial Public Offering (IPO) is the first sale of a company’s common stocks to investors on a public stock exchange. It is widely believed that IPO’s price appears to have relationship with its listing market price. Investor’s general perception shows IPO is under pricing and likely to obtain capital gain if immediately sell their shares in secondary market on the first day of IPO’s trading. However, there are cases whereby first day closing price is same or lower that IPO price. In this case, investors to understand the IPO pricing performance in short and longer terms. This research will examine the relationship of IPO offer price with its first day closing market price and longer term of first year closing market price and expected dividend to its first year closing market price. This study covers for IPO’s listed from January 2002 to October 2006 in Bursa Malaysia. The Paired Samples T-test and Multiple Regression techniques are conducted in this research. The analysis indicated a positive and significant relationship between IPO Price, First Day Closing Price and First Year Closing Price. The results show that First Day Closing is averagely 22.41 percent higher than IPO Price and First Year Closing Price is averagely 20.25 percent higher that IPO Price in five years period. This finding supports the IPO under pricing theories made by previous researches that could be applied in Bursa Malaysia as well. The regression analysis shows First Year Closing Price has significant influence from First Day Closing Price but only marginal influence from Expected Dividend. Indexing (Document Details) Author: Lee, Kai Liang. Supervisor(s): Assoc. Prof. Dr. R. Ravindran. Faculty: Graduate School. Publisher: Universiti Tun Abdul Razak. Uncontrolled Initial Public Offering (IPO).
Keywords: Public stock exchange. First Day Closing Price. First Year Closing Price. Bursa Malaysia.