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Unveiling the Pricing Anomaly: A Detailed Examination of Initial Public Offerings in Borsa Istanbul in 2023

Author

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  • Mustafa Özyeşil

    (İstanbul Aydın Üniversitesi)

  • Havane Tembelo

    (İstanbul Aydın Üniversitesi)

Abstract

This study investigates the short-term pricing anomalies observed in the initial public offerings in Borsa Istanbul during 2023. The raw returns of 39 newly listed firms were initially calculated and benchmarked against the Borsa Istanbul-100 index. To determine abnormal returns, these raw returns were adjusted for market performance over periods of one, three, and seven days post-offering. The statistical significance of these abnormal returns was evaluated using t-statistics at a 5% significance level. The results demonstrate statistically significant pricing anomalies, thereby challenging the market efficiency hypothesis. The presence of these anomalies shows that market participants do not immediately incorporate all available information into IPO pricing. This research contributes to the literature by highlighting the unique dynamics of an emerging market and provides empirical evidence of persistent short-term anomalies in initial public offering pricing in Borsa Istanbul. It underscores the need for enhanced regulatory frameworks to improve market efficiency and offers strategic insights for investors navigating the Turkish IPO market.

Suggested Citation

  • Mustafa Özyeşil & Havane Tembelo, 2025. "Unveiling the Pricing Anomaly: A Detailed Examination of Initial Public Offerings in Borsa Istanbul in 2023," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 75(1), pages 97-116, July.
    • Handle: RePEc:ist:journl:v:75:y:2025:i:1:p:97-116
    DOI: 10.26650/ISTJECON2024-1499157
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    References listed on IDEAS

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