Pricing effects of private seasoned equity issues in New Zealand's laissez-faire regulatory environment
Since the late 1980s New Zealand (NZ) has often been heralded for its free-market approach and laissez-faire attitude towards regulations in the financial market. We find that private placements issued at a premium to current market price exhibit a permanent positive impact on firm value. In contrast, those placed at a discount experience negative announcement returns and a significant run-down in returns following the announcement. There is a strong positive relationship between abnormal announcement returns and the price at which shares are placed which suggests placement price conveys important information regarding firm quality and value. We also find evidence of significant higher volumes which support market rumors that placement purchasers are immediately dumping shares purchased at a discount onto the market for an instant profit.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 18 (2006)
Issue (Month): ()
|Contact details of provider:|| Postal: 77 Water Street, 10th Floor, New York NY 10005|
Phone: +1 212 284 8600
Web page: http://www.capco.com/
When requesting a correction, please mention this item's handle: RePEc:ris:jofitr:0930. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Shahin Shojai)
If references are entirely missing, you can add them using this form.