IPO Under-pricing Phenomenon Approach: Does Covid-19 Has a Negative Sectoral Impact? (original) (raw)
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IJMRAP, 2022
The Covid-19 pandemic impacts health, education and the economy. Companies need a large source of funds to survive in a pandemic situation, therefore companies sell shares to the public by conducting an Initial Public Offering (IPO). The phenomenon of underpricing often occurs when conducting an IPO. This study tries to find factors that can affect the level of underpricing in companies that conduct IPOs during the pandemic situation until the end of the Covid-19 pandemic from 2019 to 2021. There are several internal factors that affect underpricing such as operating cash flow, financial leverage, capital structure, accounts receivable turnover, inventory turnover, and total asset turnover. The sampling technique used a purposive sampling method with 160 populations that met the criteria of 60 data, after outliers there are 47 samples use in this study. The analysis method used is multiple linear regression analysis. The research provides results that financial leverage, capital structure, accounts receivable turnover, and total asset turnover affect underpricing, meanwhile operating cash flow and inventory turnover have no effect on underpricing.
IMPACT OF COVID-19 PANDEMIC ON PERFORMANCE OF IPO’S IN INDIA
IAEME PUBLICATION, 2021
The Novel coronavirus has become the world's most economically costly pandemics recently. To provide an understanding of the effects of COVID-19 on the IPO market, this paper investigates the impact of the COVID-19 pandemic on daily market returns of newly listed companies over the period from 1st January 2020 to 31st October 2020. Through this study, we found that IPO performance continued to thrive despite the pandemic. Using panel data regression, we found IPO's response to daily new confirmed cases and deaths is not significant. The performance of newly listed companies responded negative to total deaths but not to a very great extent.
Sector-Wise Exploration on Indian Ipos During Pre and Post COVID-19
CERN European Organization for Nuclear Research - Zenodo, 2022
This paper examines the listing Day performance of IPOs in India before and during the pandemic by segmenting the IPOs into three sectors: industrial, financial, and service. The t-test was used on Market Adjusted Abnormal Return, which was calculated sector-by-sector, and it was discovered that IPOs in the Industrial sector were significantly underpriced when compared to the other two sectors. The Ordinary Least Squares Regression (OLS) model was used to examine the effect of market index return, listing gain, oversubscription, issue price, and issue size on IPO underpricing. The OLS results show that, with the exception of market index return, all of the above factors had a significant effect on underpricing. The study indicates that the short-term returns of the IPOs are considered vital by the investors because of the underlying belief of buy low and sell high. Investors believe that the stock prices would in most cases increase after an IPO and participate more in the primary market. The findings of the study will provide insights to the investors on the IPOs and its initial returns.
Journal of Economics, Finance and Accounting Studies, 2022
The COVID-19 health crisis has been the most significant occurrence witnessed in practically all countries across the world since the beginning of 2020, especially in the Philippines. This study examined the impacts of the COVID-19 pandemic on the Philippine Stock Exchange daily prices of five IPO companies, focusing on the consumer and goods industry to identify its winners and losers. The literature review focused on the rapid spread of COVID-19 and its major impact on financial markets, as well as how the world responded with pandemic-like COVID-19 outbreaks. With the outbreak of the COVID-19, the world's stock markets were confronted with significant uncertainty. Furthermore, the COVID-19 crisis has been found to have damaged nearly every aspect of human life, and the strict approaches implemented, such as border closures, stay-at-home orders, and lockdowns, have greatly affected the economies and financial markets of many countries. It was also observed that even though the...
Capital Market Reaction to Covid-19 Pandemic on LQ45 Shares at Indonesia Stock Exchange (IDX
Information contained in a non-economic event and not directly related to the capital market can influence investors in making investment decisions. Outbreaks of infectious diseases can cause serious economic disruption. The purpose of this study is to test whether the announcement of the first case of COVID-19 in Indonesia contains information that can make the market react marked by an abnormal return in the observation period. This research was conducted on issuers that are members of the LQ45 Index with a sample size of 40 companies through non-probability sampling, namely purposive sampling technique. This study uses the event study method with an event window period of five months before (t-5) to five months after (t + 5) including the day of the event announcement, the estimated return in this study uses the market adjusted model. The data analysis technique of this research is the paired sample t test parametric statistical test. The results show that the announcement of the first case of COVID-19 in Indonesia had a negative impact on the Indonesia Stock Exchange but it was not significant, as evidenced by the absence of differences in abnormal returns before and after the announcement of the first case of COVID-19 in Indonesia.
Basic and Applied Accounting Research Journal
The first Covid-19 case in Indonesia was announced on March 2 2020. This study aims to find out whether there is a significant difference in stock prices and stock trading before and after Covid-19 entered Indonesia (Case Study of Registered Food and Beverages Companies on the Indonesian Stock Exchange). The data for this study were taken 9 months before and 9 months after Covid-19 in Indonesia. Data were processed by paired sample t-test, using SPSS. From the results of the data processing, it shows that there was a significant difference in stock prices before and after the announcement of the first case of Covid-19 in Indonesia. This is indicated by a significance value of 0.011 <0.05. Where stock prices have decreased compared to before the Covid-19 case. Meanwhile, stock trading volume also shows a significant difference. Where the significance value is 0.003 <0.05. The stock trading volume after the announcement showed an increasing value.
2021
This research is a case study that aims to trace market reactions caused by an event in the form of non-economic circumstances which is Covid-19. The data used in this study is the closing price of each sectoral index from the Indonesia Stock Exchange. The data are taken cover the period of 5 days before and after the determination of covid-19 as a global pandemic. In this study hypothesis testing using paired sample t-test. , there is a significant difference in the stock price index on the Indonesian stock exchange before and after the determination of Covid-19 as a global pandemic.
Impact of Covid-19 on Share Prices in Various Sectoral Industry in Indonesia Stock Exchange
This research was conducted due to the lack of research on the impact of Covid-19 on stock prices and stock trading volume activities in each sector in the sectoral industry of the Indonesian Stock Exchange. The benchmarks used in this study are abnormal returns and trading volume activity. Research related to event study which still has research gaps is also the reason why this research was conducted. The research period was chosen for 161 days which was divided into two periods, namely the estimation period of 140 days and a 21 day window period including 10 days before the event and 10 days after the event, and 1 day was chosen as the event date on March 2, 2020 when the government announced the first case. The results of the statistical tests carried out show that there is no difference in the average abnormal return of the entire sector before and after Covid-19, while the different results are found in the variables of average trading volume activity of the whole sector, average abnormal return and average trading volume activity which are significant in each sector. shows that the three variables have differences before and after the announcement of Covid-19. The results of the analysis in measuring abnormal returns and trading volume activity using the event study method, that the findings based on each sector are better because they describe the results of each sector in the IDX sectoral index.
International journal of innovative technologies in economy/International Journal of Innovative Technologies in Economy, 2024
The coronavirus, or COVID-19, is caused by the SARS-CoV-2 virus, first discovered in China in late 2019 and as of June 2021. Since then, the virus has spread worldwide. Indonesia has reported more than 31,000 cases of COVID-19 (Gugus Tugas Percepatan Penanganan COVID-19, 2020), making it the second-highest country in ASEAN, according to CNN Indonesia (2022). The global tally has surpassed 6.7 million cases, with over 395,000 fatalities. This pandemic has not only affected the health sector but has also impacted various other economic sectors, including the stock market. Developing countries like Indonesia have felt the repercussions, evident in the movements of the Composite Stock Price Index (IHSG). Studying the IHSG's trends before and during the COVID-19 pandemic is crucial as a guide for governments and companies in managing foreign fund flows, maintaining index stability, and preserving economic value (Nurmasari, 2020). In this context, the Indonesia Stock Exchange (PT. Bursa Efek Indonesia) and the Financial Services Authority (Otoritas Jasa Keuangan or OJK) have introduced new policies to prevent a decline in the capital market caused by Covid-19. The decision by the Indonesia Stock Exchange states that these measures are taken to reduce the spread of the virus.