An Analysis of the Long-Run Performance IPOs and Effects in the Kenyan Stock Market

Listing of a company in the securities exchange has been observed to be followed by underpricing first day and long term period underperformance terms pricing subsequent days. Consequently, there considerable curiosity from stakeholders, investors academics comprehend assessments why companies go public issues surrounding short long-run performance newly issued equities. Underpricing is necessary induce uninformed participate IPO offering when faced with adverse selection informed investors. This often leads price not reflecting fair value IPO. The objective study was determine IPOs effects Kenyan stock market for 2007-2014. A descriptive survey research design employed study. population encompassed all 64 listed at NSE as 2016. non-probability purposive sampling technique. Data collected this secondary data obtained website, lists Central Bank Kenya website 2007 2014. analyzed using Statistical Package Social Science (SPSS). Mean Average Buy Hold Returns (MABHR), Abnormal (AR) Cumulative (CAR) were used calculate stocks. T-statistic CAR computed test its significance. T-test conducted 95% confidence level find if MABHR statistically significant after announcement.