IPO Underpricing and Long-Run Performance: Evidence from the Six Countries of the Gulf Cooperation Council (GCC)

2013 ◽  
Author(s):  
Ahmed S. Alanazi
Keyword(s):  
Gulf Cooperation Council ◽  
Ipo Underpricing ◽  
Long Run

IPO Underpricing over the Very Long Run

CFA Digest ◽  
2009 ◽  
Vol 39 (4) ◽  
pp. 65-67
Author(s):  
Charles F. Peake
Keyword(s):  
Ipo Underpricing ◽  
Long Run

IPO Underpricing over the Very Long Run

2009 ◽  
Vol 64 (3) ◽  
pp. 1407-1443 ◽  
Author(s):  
DAVID CHAMBERS ◽  
ELROY DIMSON
Keyword(s):  
Ipo Underpricing ◽  
Long Run

scholarly journals Impact of family ownership, management, and generations on IPO underpricing and long-run performance

2021 ◽  
Vol 18 (4) ◽  
pp. 266-279
Author(s):  
Lukas Setia-Atmaja ◽  
Yane Chandera
Keyword(s):  
Family Firms ◽  
Negative Relationship ◽  
Family Firm ◽  
Family Ownership ◽  
Agency Conflicts ◽  
Ipo Underpricing ◽  
Controlling Shareholders ◽  
Long Run ◽  
Study Results ◽  
The Impact

This paper examines the impact of family ownership, management, and generations on IPO underpricing and the long-run performance of publicly listed firms in Indonesia from 2004 to 2015. This study is based on agency theory, which discusses the relationship between shareholders and management, as well as controlling and non-controlling shareholders. Study results show that IPO underpricing was 28% higher for family firms than non-family firms. Among family firms, a family member’s presence as a Chief Executive Officer (CEO) significantly reduced the level of IPO underpricing. A negative relationship between family CEO and IPO underpricing was only observed if a CEO at the time of IPO was the founder instead of family descendants. A long-run return of family-firm IPOs was more likely to underperform their non-family-firm counterparts. The findings in the primary market suggest that investors predict bigger issues of agency conflicts between controlling and non-controlling shareholders in family firms than the issues of agency conflicts between shareholders and management in non-family firms. Since investors consider family-firm IPOs to be riskier than non-family firms, they demand a higher level of IPO underpricing to compensate for such risks. The results in the secondary market confirm the findings in the primary market.

scholarly journals Gulf Cooperation Council Monetary Union: Business Cycle Synchronization, Shocks Correlation

2012 ◽  
Vol 11 (2) ◽  
pp. 137 ◽  
Author(s):  
Nabil Ben Arfa
Keyword(s):  
Business Cycle ◽  
Supply And Demand ◽  
Gulf Cooperation Council ◽  
Output Growth ◽  
Structural Var ◽  
Business Cycle Synchronization ◽  
Demand Shocks ◽  
Gcc Countries ◽  
Supply And Demand Shocks ◽  
Long Run

In this paper we assess the readiness of the Gulf cooperation council members (Qatar, Saudi Arabia, Kuwait and Bahrain) to form a viable currency monetary area. It deals with business cycle synchronization and economic shocks correlation. To do so we employ different methods, first we extract the business cycle component of output using Hodrick-Prescott filter. Second, supply and demand shocks are recovered from an estimated structural VAR model of output growth and inflation using long run restriction (Blanchard and Quah). We then check the (A) symmetry of these shocks by calculating the correlation between GCC countries. Its appears from our investigation that there is no business cycle synchronization evidence between GCC countries, business cycle is rather divergent among them. And despite of the demand shocks symmetry, supply shocks are rather asymmetric. We therefore conclude that there is no evidence of the readiness of the GCC members to form a monetary currency union

How the unremunerated reserve requirement by the Bank of Thailand affects IPO underpricing and the long-run performance of IPOs

2016 ◽  
Vol 24 (3) ◽  
pp. 317-342 ◽  
Author(s):  
Kulabutr Komenkul ◽  
Dhanawat Siriwattanakul
Keyword(s):  
Initial Public Offering ◽  
Institutional Investors ◽  
Time Lag ◽  
Government Ownership ◽  
Ipo Underpricing ◽  
Reserve Requirement ◽  
Content Type ◽  
Long Run ◽  
Ex Ante ◽  
The Government

Purpose The purpose of this paper is to investigate the characteristics of the Initial Public Offering (IPO) market, IPO underpricing and the long-run performance of IPOs and to find out the ex ante difference in the market structure between the pre-, during and post-periods of the Unremunerated Reserve Requirement (URR) at the 30 per cent rate. Design/methodology/approach The sample is a total of 245 IPOs listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (mai), during the period 2001-2012. The explanatory variables consist of the age of the firm, the offer size, the time-lag between the IPO date and the first trading date, the proportion of shares owned by the government and the IPO subscription rates by foreign and institutional investors. In further analysis, the authors adopt a two-stage least squares approach to derive unbiased estimates of the relationship between government ownership, IPO underpricing and firm quality. Findings We find the ex ante uncertainty and earning management partially explain the IPO underpricing phenomenon in the Thai IPO market. Our findings support the impresario hypothesis shown by the negative relation between underpricing and the three-year after-market. In addition, the 30 per cent URR imposition by the Thai Central Bank promptly reduced the number of IPO issues and the proportion of foreigners and institutions subscribing to IPOs. However, it was able to enhance the degrees of IPO underpricing and the long-run performance of IPOs in Thailand. Practical implications The results presented in this paper may be, therefore, useful for investors, security analysts, companies and regulators in many other emerging markets beyond Thailand. Given the results from the over-performance of IPOs in the post-URR period, investors may do better holding Thai IPOs for a long period with a likelihood of gaining a higher return. Originality/value This paper contributes to the literature concerning IPOs – in that we have considered two stock markets, namely, SET and mai. Furthermore, unique data such as the government ownership and proportion of IPOs subscribed by foreign and institutional investors are taken into consideration in our research model. To the best of our knowledge, for the first time in the Thai IPO market, the effect of the 30 per cent URR on IPO underpricing and the performance of IPOs in the long-run has been closely examined.

scholarly journals Gulf Cooperation Council (GCC) and Regional Integration in Asia

2021 ◽  
Vol 5 (1) ◽  
pp. 61-79
Author(s):  
Debesh Bhowmik
Keyword(s):  
Economic Integration ◽  
Concentration Index ◽  
Gulf Cooperation Council ◽  
Export Share ◽  
Vector Error Correction ◽  
Long Run ◽  
Export Shares ◽  
Short Run ◽  
Import Share ◽  
Asian Integration

In Asia, SAARC (South Asian Association of Regional Cooperation), ASEAN (Association of South East Asian Nations) and GCC (Gulf Cooperation Council) are being considered as an active regional trading blocs although East Asian integration is on primary cooperation stage and BIMSTEC is treated as organised sub-regional trading bloc. The GCC has completed all criterion of economic integration except introduction of a single currency and ASEAN is advancing its optimum stage of monetary integration but the advancement of SAARC is halted by the shock of non-cooperation from Pakistan. Therefore, contribution of GCC in integrating Asian bloc is to scrutinise in a new outlook. In this paper, the author endeavours to show the impact of economic integration of Gulf Cooperation Council (GCC) on the Asian economic integration in the sense that the process of integration of GCC with SAARC and ASEAN can accelerate the criterion of Asian integration process. Therefore, the author used cointegration and vector error correction model among the indicators of trade integration of exports such as Asian export share, intra export share of GCC, export concentration index of GCC, ASEAN’s export with GCC and SAARC’s export with GCC during 1995-2019. Similarly, the author applied same methodology among the trade indicator of imports such as Asian import share, intra import share of GCC, import concentration index of GCC, ASEAN’s import with GCC and SAARC’s import with GCC during the specified period. The findings revealed that Asian export share has long run significant causalities with SAARC and ASEAN export shares to GCC. Intra export share of GCC has long run causalities with SAARC and ASEAN export shares to GCC. The export concentration index of GCC has significant long run causalities with SAARC and ASEAN export shares to GCC respectively. Even, the short run causalities from export concentration index of GCC to intra export share of GCC, export share of ASEAN and SAARC with GCC and the short run causality from ASEAN export share with GCC to export share of Asia and from intra export share of GCC to export share of ASEAN with GCC were strictly observed. Again, the import share of Asia has long run causalities with the import shares of ASEAN and SAARC with GCC. The intra import share of GCC has long run causalities with the import shares of ASEAN and SAARC with GCC and the import concentration index of GCC has long run causalities with the import shares of ASEAN and SAARC with GCC respectively. The intra import share of GCC has short run causalities with import share of Asia, import concentration index of GCC and import share of ASEAN with GCC respectively. The import concentration index has short run causality with the import share of Asia. The import share of SAARC with GCC has short run causality with import share of ASEAN with GCC. The cointegration and vector error correction among Asian GDP, sum of intra export and import shares of GCC, sum of export and import shares of ASEAN with GCC, and sum of export and import shares of SAARC with GCC during 1995-2019 indicated that the GDP of Asia has long run causalities with the sum of intra export and import shares of GCC, the sum of export and import shares of ASEAN with GCC and the sum of export and import shares of SAARC with GCC and even they have short run causalities also. All these observations can justify that GCC has great impact on Asian economic integration process associated with SAARC and ASEAN.

Impact of anchor investors on IPO returns during pre-market and aftermarket: evidence from India

2019 ◽  
Vol 17 (3) ◽  
pp. 351-368 ◽  
Author(s):  
Vikas Gupta ◽  
Shveta Singh ◽  
Surendra S. Yadav
Keyword(s):  
Empirical Analysis ◽  
Initial Public Offering ◽  
Robust Regression ◽  
Stock Exchange ◽  
Ipo Underpricing ◽  
Content Type ◽  
Long Run ◽  
Post Market ◽  
The Impact ◽  
The Empirical Analysis

Purpose The unique regulatory design of India provides us with the opportunity to disaggregate traditional initial public offering (IPO) underpricing into three categories: voluntary, pre-market and post-market. The presence of anchor investors in India makes it a compelling case to study. These individuals were introduced to bring transparency in the book building process, but their impact on pre-market and post-market underpricing was not foreseen. Therefore, the purpose of this paper is to evaluate the impact of anchor investors on the IPO underpricing after disaggregation and on the long-run performance of an IPO. Design/methodology/approach A sample covering 232 IPOs from a period of 2009–2018 is included. The empirical analysis explores the impact of various firm-specific as well as market-specific variables on IPO underpricing. The financial data for the empirical analysis are extracted from Prime database and websites of National Stock Exchange and Bombay Stock Exchange. To deal with the outliers effectively, this paper deploys “robust-regression.” Findings The study finds that investor’s subscription rate and voluntary underpricing impacts the pre-market but do not have any impact on the post-market while the age of the firm has a different impact on both the markets and the number of anchor investors have the same impact in both markets. Anchor investors’ participation increases the pre-market as well as post-market underpricing. Lastly, the long-term performance of IPOs backed by the anchor investors is high relative to the IPOs not subscribed to by the anchor investors. Originality/value This paper is believed to be the first attempt to study the impact of anchor investors on the disaggregated IPO underpricing. The findings of this study will have a great insight for the investors.

scholarly journals Innovation and Entrepreneurship for the Diversification and Growth of the Gulf Cooperation Council Economies

2017 ◽  
Vol 1 (1) ◽  
pp. 69 ◽  
Author(s):  
Hela Miniaoui ◽  
Daniele Schilirò
Keyword(s):  
Gulf Cooperation Council ◽  
Gulf Region ◽  
Present Contribution ◽  
Current State ◽  
Gcc Countries ◽  
Long Run ◽  
Key Drivers ◽  
Arab States ◽  
Better Than ◽  
Innovation And Entrepreneurship

The Arab States of the Gulf region have vast reserves of petroleum. The reduction in oil prices since the summer of 2014, and their volatility pose strong challenges to the six economies of the Gulf Cooperation Council (GCC). In the present contribution, we argue that, in the long-run, diversified economies perform better than mono-sector economies. Also, innovation and entrepreneurship are key drivers for the diversification and growth of GCC economies. More specifically, in this article we analyze the innovation performance of the GCC economies and we consider their innovation strategies. In addition, we provide an overview of entrepreneurship in the GCC countries to grasp its current state, aiming at identifying the conditions to foster entrepreneurship in order to develop the non-oil private sector. Finally, we discuss the policies that would be required to boost innovation and stimulate entrepreneurship in the Arab States of the Gulf with the aim of diversifying their economies and enhancing their growth.

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