The Market Performance of Initial Public Offerings in the Istanbul Stock Exchange (original) (raw)
Related papers
Journal of Multinational Financial Management, 2000
This paper empirically analyzes the initial and after-market returns for the Turkish initial public offerings (IPOs) to provide an emerging market case of international evidence on performances of IPOs. The sample consists of 163 firms listed and traded on the Istanbul Stock Exchange during the period of 1990 -1996. The results show that the Turkish IPOs are underpriced on initial trading day on average of 13.1%. The initial underpricing is 11.7% for industrial firms, 15% for financial firms and 17.6% for others. In terms of sub-sectors the highest return is obtained in Tourism/Transportation group, while the lowest return is observed in Machinery/Equipment group. With the exception of Banking group, all of the sub-sectors experienced statistically significant initial underpricing. The investigation of factors influencing the initial performance show that size of issuer, rising stock market between the date of public offering and first trading day, institutional ownership, and self-issued offerings are significant determinants of underpricing.
The Performance of IPOs in Istanbul Stock Exchange in Year 2000
Dogus Universitesi Dergisi, 2011
Initial public offering (IPO) may be the lowest cost financing for firms to obtain funds from small and institutional investors. The commissions, fees and other related expenses incurred are considerably small compared to those of short or long term loan or bond financing. This empirical study examines the performance of all IPOs in Istanbul Stock Exchange during the year of 2000. The study employs standard event study methodology for 34 IPOs over a 30 day event window. The empirical findings are consistent with most of the previous literature. The results support that the first two days of IPOs generally provide positive abnormal returns.
The underpricing and long run performance of initial public offerings - Evidence from Turkey
2008
This study investigates the underpricing and long run performance of initial public offerings in an emerging market economy, Turkey, by using event study methodology. Consistent with the evidence from international experiences, Turkish IPOs are underpriced by 7.3 percent on average during 1999-2007. Underpricing is higher in financials compared to non financials as measured by the first trading day market adjusted returns. Turkish IPOs are underpriced more in bullish markets consistent with "hot issue" markets. Pre event market trend is the most significant variable affecting underpricing while firm specific characters have minor effects in underpricing. 12 months after the offer, IPOs underperform the market by 12.4 percent. Firms with lower initial returns underperform more in contrast to international evidence though this result seems sensitive to the choice of the time interval.
Business & Management Studies: An International Journal, 2022
One of the most common anomalies related to price performance in initial public offerings (IPOs) is short-term underpricing and long-term underperformance anomalies. There are many studies on these anomalies conducted in the previous literature. This article's primary purpose is to contribute to this existing academic research by examining the underpricing for the IPOs made in Borsa Istanbul during 2021. For this purpose, 32 initial public offerings performed in Borsa Istanbul in 2021 as of the analysis date are examined. In the analysis, the first day, the first three days and the first seven days after the issuance are described as the short-term. Based on empirical findings, no short-period underpricing is detected for all public offerings performed in Borsa Istanbul in 2021. In other words, it can be concluded that investors can't earn residual (abnormal) returns by purchasing stocks from these public offerings in a short period.
Managerial Finance, 2002
The pricing and performance of IPOs is one of those issues that never are laid to rest in the finance literature. As a result of the long-standing debate on the reasons of abnormal initial returns from IPOs and long-term under-performance of IPOs, various hypotheses have been formulated by finance researchers. The empirical finance literature contains both supporting and conflicting evidence for these hypotheses. Consequently, the present study aimed to investigate the IPO returns by the data generated by an emerging market, namely ISE, for the period from 1990 to 1997, in two stages. In the first stage, the relationship between the returns is analyzed by comparing mean returns and by univariate regression analysis. In the second stage, the determinants of returns are examined by cross sectional analysis and multivariate regression analysis. The findings of the present study provide evidence to the fads hypothesis and the Winner's Curse hypothesis. Moreover, the factors that decrease the uncertainty associated with the IPOs are found to lead to lower returns. It must also be emphasized that the findings of the study does not provide evidence of long-term underperformance. argue that the listing requirements of trading systems may act as a rationing mechanism leading to less underpricing. Thus, the evidence provided by these researchers support the Winner's Curse Hypothesis. In contrast to the above evidence, , who similarly focus on the effect of the trading system, reject this hypothesis based on their findings from the Singapore IPO market.
UNDERPRICING IN TURKEY: A COMPARISON OF THE IPO METHODS
This paper addresses the question of what kind of selling and underwriting procedure might be preferred for controlling the amount and volatility of underpricing in the Istanbul Stock Exchange (ISE). Using 1993-2005 firm and issue data, we compare the three substantially different IPO methods available in the ISE. One is very similar to the book building mechanism used in the U.S., another is the fixed price offer, and the third one is the sale through the stock exchange method. The empirical analysis reveals significant first day underpricing of 7.01% in fixed price offer, 11.47% in book building mechanism, and 15.68% in sale through the stock exchange method. Finally, we also show that fixed price offers can better control the impact of market information on underpricing than sale through the stock exchange method.
The Short and Long Term Performance of Initial Public Offerings in the Cyprus Stock Exchange
Journal of Financial …, 2007
This study examines the price performance of initial public offerings (IPOs) in the Cyprus Stock Exchange during the period 1999-2002. It investigates the difference between the IPOs listing price and their equilibrium market price through studying a sample of 75 new listed companies. Specifically, it examines the differences between the listing price of IPOs and their equilibrium market prices at the end of the first day, sixth, twelfth, twenty-fourth and thirty-sixth month. From the derived results it is evident that Cypriot IPOs have extremely large positive initial returns, especially on the end of the first trading day. Long term results, not taking into account the first day returns, are much lower and sometime even negative. Both these trends are in agreement with the outcomes of international empirical studies.
2016
This study analyses short-run underpricing of Initial Public Offering at Karachi Stock Market of Pakistan by applying different event study models. The data were used for the period 2001-2013. The short-run performance of the IPO was evaluated by initial return on first day, yearly return for the first, fifth, tenth and fifteenth days after being listed of a firm and abnormal returns in different states of the economy. For analysis of short-run performance of IPO under different states of economy, data were divided into four states i.e. normal, boom, recession, recovery and general. It was found that IPOs gave positive significant initial return of 182.35%. In normal, boom and general states of economy, it provided significant positive return but in recession and recovery, it was insignificant
International journal of business and economics, 2014
This paper investigates the performance of Jordanian IPO’s using data from Amman Stock Exchange (ASE) over the period 1981-2002. We studied the sensitivity of the model used to estimate the cumulative average abnormal returns. In doing that, we employed three different models and used two approaches to test the result: Standard event-time analysis and the calendar-time approach. The three models used to estimate the cumulative average abnormal returns produce significant negative abnormal returns when we employ event-time analysis. However, the calendartime approach concludes that the long-term performance of Jordanian IPO’s is not different than that of the overall market.