TY - JOUR
T1 - Privatisation initial public offerings in Malaysia
T2 - initial premium and long-term performance
AU - Paudyal, K.
AU - Saadouni, B.
AU - Briston, R.J.
PY - 1998/11/30
Y1 - 1998/11/30
N2 - This study addresses four major issues related to privatisation initial public offers (PIPOs) and other initial public offers (IPOs) in Malaysia. First, an analysis of initial excess returns suggests that, on average, Malaysian IPOs are underpriced and PIPOs offer significantly higher initial returns than other IPOs. Second, regression based analysis reveals that over-subscription, market volatility, proportion of shares sold, underwriters reputation, and ex ante risk together explain over three-quarters of the variation in the excess returns offered by Malaysian PIPOs. However, this model can only explain 10% and 36% of other IPOs and the whole sample respectively. Third, the analysis of secondary market performance suggests that neither PIPOs nor other IPOs significantly outperform/ underperform the market over three years. Further analysis reveals that the IPOs with higher initial return underperform the market while those with low initial return outperform. Finally, the paper confirms that IPOs underwritten by reputed underwriters are significantly better long-term investments as compared to the IPOs underwritten by less reputed underwriters.
AB - This study addresses four major issues related to privatisation initial public offers (PIPOs) and other initial public offers (IPOs) in Malaysia. First, an analysis of initial excess returns suggests that, on average, Malaysian IPOs are underpriced and PIPOs offer significantly higher initial returns than other IPOs. Second, regression based analysis reveals that over-subscription, market volatility, proportion of shares sold, underwriters reputation, and ex ante risk together explain over three-quarters of the variation in the excess returns offered by Malaysian PIPOs. However, this model can only explain 10% and 36% of other IPOs and the whole sample respectively. Third, the analysis of secondary market performance suggests that neither PIPOs nor other IPOs significantly outperform/ underperform the market over three years. Further analysis reveals that the IPOs with higher initial return underperform the market while those with low initial return outperform. Finally, the paper confirms that IPOs underwritten by reputed underwriters are significantly better long-term investments as compared to the IPOs underwritten by less reputed underwriters.
KW - G12
KW - G32
KW - IPO
KW - long-term performance
KW - Malaysia
KW - privatization
KW - underwriters reputation
UR - http://www.scopus.com/inward/record.url?scp=0011052654&partnerID=8YFLogxK
UR - https://www.sciencedirect.com/journal/pacific-basin-finance-journal
U2 - 10.1016/S0927-538X(98)00018-3
DO - 10.1016/S0927-538X(98)00018-3
M3 - Article
AN - SCOPUS:0011052654
SN - 0927-538X
VL - 6
SP - 427
EP - 451
JO - Pacific Basin Finance Journal
JF - Pacific Basin Finance Journal
IS - 5
ER -