Short-run underpricing and its determinants: Evidence from Australian IPOS

Underpricing of Privatised IPOs: The Australian Experience

We investigate the price performance of initial public o erings (IPOs) of formally state-owned companies in Australia. On average, privatised IPOs in Australia are underpriced by about 11%, which is not signi cantly di erent from the magnitude of underpricing of the privately-owned IPOs. This percentage is also similar to that of privatised share o erings in other OECD countries. In addition, c...

A market microstructure explanation of IPOs underpricing

In a typical IPO game with first-price auctions, we argue that risk-averse investors always underbid in equilibrium because of subjective interpretations of the firm’ communication about its actual value and resulting risk aversion about the likelihood of facing investors with higher valuations. We show that the noisier the investors’ inferences of the firm’ value (in the sense of first-order s...

Long-Run and Short-Run Causality between Stock Price and Gold Price: Evidence of VECM Analysis from India

The prime objective of the study is to identify the long-run and short-run relationship between Indian stock price viz., BSE SENSEX (hereafter named as BSE) and gold price (GOLD) in India. The daily closing price data were collected for the period of ten years ranging from 1st April 2004 to 31st March 2014 with 2490 observations. The study employed two models: Model one us...

An Empirical Investigation of Underpricing in Chinese IPOs

We study the underpricing of Chinese IPOs, using data of 308 flrm-commitment new issues. We flnd that underpricing can be explained in terms of a separating equilibrium under asymmetric information in which underpricing is a strategy for flrms to signal their value to investors. We show that bribery is an unlikely cause of the high IPO underpricing observed in the Chinese data. We also investig...

Initial public offerings , subsequent seasoned equity offerings , and long - run performance : Evidence from IPOs in Germany