Explaining mispricing of initial public offerings in Singapore
This study examines the relative importance of underpricing as a signal of firm value, underwriter certification, subscription levels of shares on offer, and uncertainty surrounding firm value on mispricing of initial public offerings. A sample of 100 Singaporean initial public offerings (IPOs) during the period 1998 to 2000 indicates that subscription levels of shares on offer have the most significant impact on mispricing. This is followed by offer price, market value and trading volume in IPO shares on the first day of trading, and uncertainty surrounding IPO value. Underwriter reputation appears to be only marginally influential, while equity market conditions and industry sector effects seem to be irrelevant in explaining mispricing. Singaporean IPOs have been selected because this is only one of a few markets whose unique institutional characteristics and data availability allows for such a test.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 16 (2006)
Issue (Month): 18 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAFE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAFE20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kevin Chiang & T. Harikumar, 2004. "Offering price clusters and underpricing in the US primary market," Applied Financial Economics, Taylor & Francis Journals, vol. 14(11), pages 809-822.
- Jegadeesh, Narasimhan & Weinstein, Mark & Welch, Ivo, 1993. "An empirical investigation of IPO returns and subsequent equity offerings," Journal of Financial Economics, Elsevier, vol. 34(2), pages 153-175, October.
- L. Cassia & G. Giudici & S. Paleari & R. Redondi, 2004. "IPO underpricing in Italy," Applied Financial Economics, Taylor & Francis Journals, vol. 14(3), pages 179-194.
- Beat Reber & Bob Berry & Steve Toms, 2005. "Firm resources and quality signalling: evidence from UK initial public offerings," Applied Financial Economics, Taylor & Francis Journals, vol. 15(8), pages 575-586.
- Leland, Hayne E & Pyle, David H, 1977.
"Informational Asymmetries, Financial Structure, and Financial Intermediation,"
Journal of Finance,
American Finance Association, vol. 32(2), pages 371-387, May.
- Hayne E. Leland and David H. Pyle., 1976. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Research Program in Finance Working Papers 41, University of California at Berkeley.
- Lee, Philip J. & Taylor, Stephen L. & Walter, Terry S., 1996. "Expected and realised returns for Singaporean IPOs: Initial and long-run analysis," Pacific-Basin Finance Journal, Elsevier, vol. 4(2-3), pages 153-180, July.
- Koh, Francis & Walter, Terry, 1989. "A direct test of Rock's model of the pricing of unseasoned issues," Journal of Financial Economics, Elsevier, vol. 23(2), pages 251-272, August.
- Clement Wang & Kangmao Wang & Qing Lu, 2002. "Do venture capitalists add value? A comparative study between Singapore and US," Applied Financial Economics, Taylor & Francis Journals, vol. 12(8), pages 581-588.
- Kevin Keasey & Helen Short, 1997. "Equity retention and initial public offerings: the influence of signalling and entrenchment effects," Applied Financial Economics, Taylor & Francis Journals, vol. 7(1), pages 75-85.
- White, Halbert, 1980. "Using Least Squares to Approximate Unknown Regression Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 149-170, February.
- Michael Firth, 1998. "IPO profit forecasts and their role in signalling firm value and explaining post-listing returns," Applied Financial Economics, Taylor & Francis Journals, vol. 8(1), pages 29-39.
- Kian-Guan Lim & Edward Ng, 1999. "A theory of IPO pricing with tender prices," Applied Financial Economics, Taylor & Francis Journals, vol. 9(5), pages 433-442.
- Beatty, Randolph P & Welch, Ivo, 1996. "Issuer Expenses and Legal Liability in Initial Public Offerings," Journal of Law and Economics, University of Chicago Press, vol. 39(2), pages 545-602, October.
- Ruth Seow Kuan Tan & Li Li Eng & Andrew Khoo, 1999. "The effects of offering method and trading location on the pricing of IPOs in Singapore," Applied Financial Economics, Taylor & Francis Journals, vol. 9(5), pages 491-499.
- Yen-Sheng Huang, 1999. "The price behaviour of initial public offerings on the Taiwan Stock Exchange," Applied Financial Economics, Taylor & Francis Journals, vol. 9(2), pages 201-208.
- Grinblatt, Mark & Hwang, Chuan Yang, 1989. " Signalling and the Pricing of New Issues," Journal of Finance, American Finance Association, vol. 44(2), pages 393-420, June.
- Jenkinson, Tim & Ljungqvist, Alexander, 2001. "Going Public: The Theory and Evidence on How Companies Raise Equity Finance," OUP Catalogue, Oxford University Press, edition 2, number 9780198295990, April.
- Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:16:y:2006:i:18:p:1339-1353. 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: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.