Ipo's Performance in Pakistan

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Initial Public Offering Performance in Short-Run and Long-Run on KSE

By
Abdullah

A thesis
Submitted in partial fulfillment of the requirements
for the degree of Master of Business Administration
to Iqra University Research Centre (IURC)
at the Iqra University,
main campus, Karachi

Karachi, Pakistan
June, 2011

ACKNOWLEDGEMENT
In the name of God, the most gracious and the merciful, I have successfully completed this thesis on “Initial Public Offerings Performance In Short-run and Long-run on KSE’’. As this thesis was assigned to me by the University under the supervision of Mr. Athar Iqbal, firstly I would like to express my entire thanks to him. I have consistently benefited from his academic and research approach. His guidance made this thesis possible and also gave me an opportunity to learn new insights of research and how to perform on thesis study efficaciously. This thesis as assigned on individual basis not only involves my hard work of around a year but it is also inclusive of the contributions made by several individuals and institutions that helped me to make this thesis possible. Finally, I am grateful to my parents, for their love, support, and understanding during my research work.

ABSTRACT

Performance of initial public offerings help the investors to make a decision about when to invest, where to invest, how much to invest, what would be the time to get the maximum returns and to take investment out. The performance of IPOs is also the representation of the company’s overall performance. The objective of this study is to find out the performance of IPOs in short and long-run on KSE. Price data of last 10 years is used to conduct this research study. This study examined whether IPOs perform better in short-run or in long-run at Karachi stock Exchange. Results obtained from statistical analysis corroborate using the paired t-test technique as a statistical tool which shows that hypotheses are accepted, IPOs performance better in short-run than long-run. Mean value of short-run is 27.8428 as compared to long-run that are 3.4315.

TABLE OF CONTENTS
S.NO.| DESCRIPTION| PAGE NO.|
1.| ACKNOWLEDGEMENT…………………………………….| ii| 2.| ABSTRACT………………………………………………………| iii| 3.| LIST OF TABLES………………………………………………..| V| 4.| CHAPTER 1: INTRODUCTION………………………………... 1.1 Overview…………………………………………………….. 1.2 Research Problem…..……………………………………….. 1.3 Research Hypotheses………………………………………... 1.4 Objective of the Study……………………………………… 1.5 Definitions…………………………………………………...

| 1|
5.| CHAPTER 2: LITERATURE REVIEW…………………………| 6| 6.| CHAPTER 3: RESEARCH METHODS…………………………3.1 Method of Data Collection…………………………………..3.2 Sample Size………………………………………………….3.3 Research Model Developed………………………………….3.4 Statistical Technique…………………………………………

| 14|
7.| CHAPTER 4: RESULTS…………………………………………4.1 Findings and Interpretation of the results……………………4.2 Hypotheses Assessment Summary…………………………..| 17| 8.| CHAPTER 5: DISCUSSIONS, CONCLUSION, IMPLICATIONS AND FUTURE RESEARCH…………………5.1 Conclusion……………………………………………….......5.2 Discussion……………………………………………………5.3 Implications and Recommendations…………………………5.4 Future Research……………………………………………...| 20| 9.| Chapter 6 : REFERENCES………………………………………| 23| 10.| APPENDIX………………………………………………………| 25|

LIST OF TABLES
S.NO| TABLE| Page No.|
4.1.1| Paired samples statistic| 17|
4.1.2| Paired samples correlation| 17|
4.1.3| Paired samples test| 18|

CHAPTER 1
INTRODUCTION
1.1 Overview
Initial public offerings (IPOs) have been studied widely in the developed economies. In recent times, there has been a lot of concentration in rising markets and is being seen as a significant asset class in worldwide portfolio management. However, the performances of these small emerging markets are comparatively unknown. This study...
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