Persistent Link:
http://hdl.handle.net/10150/290150
Title:
Three essays on initial public offerings in Malaysia
Author:
Taufil Mohd, Kamarun Nisham Bin
Issue Date:
2004
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
This dissertation is a collection of three essays related to the initial public offerings (IPOs) in Malaysia. The IPO market in Malaysia has historically been tightly regulated. However, with the formation of the Securities Commission (SC) in 1993, the regulations have eased slowly. The first essay investigates the relationship between underpricing and regulations by looking at 546 IPOs from 1990 to 2002. Underpricing refers to the initial return that an investor earns if he buys shares of the IPO at the offer price and sells it at the end of the listing day at the market price. Regulations are measured by the relaxation of the pricing method, the required allocation to indigenous investors, the mechanisms to protect minority shareholders, and the length of time periods. The first three features of regulations are unique to Malaysia. The findings are mixed regarding the relaxation of the pricing guideline in 1995 since it does not lead to lower underpricing for the period from 1996 to November 7, 1997 or before the Asian financial crisis. Fraction of shares set aside for indigenous investors does not affect underpricing; length of time from price setting to listing date relates negatively to underpricing. Finally, the protective mechanisms lead to more underpricing for firms that go public between 1996 and November 6, 1997 or those that go public after 1998, i.e., after the Asian financial crisis. The second essay looks at the relationship between the universal banking facility and the costs of going public for 546 initial public offerings listed on the Kuala Lumpur Stock Exchange from January 1990 to December 2002. It is hypothesized that by sharing private information about a firm that is going public with its affiliated commercial bank, an investment bank could lower the costs of going public for the firm. Costs of going public are measured by the degree of underpricing and gross spread, or the fees paid to the underwriters as a fraction of gross proceeds. The result in this essay is that, for the period under study, firms do not reduce the costs of going public when they use the universal banking facility. The third essay looks at the three-year performance of the IPOs in Malaysia from 1994 to 2000. Evidence from most studies in different countries finds that initial public offerings (IPOs) underperform their benchmarks or matches in the long run. However, our evidence regarding the long run performance of IPOs in Malaysia is that the IPOs do not underperform their matches. The returns of the IPOs are adjusted by using either a market index or firms with similar characteristics to the IPOs. Two different matching estimators are employed to identify the firms of similar characteristics. One of the contributions of this essay is the use of a new methodology to identify the matches for the IPOs. (Abstract shortened by UMI.)
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Economics, Finance.
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Economics
Degree Grantor:
University of Arizona
Advisor:
Flores-Lagunes, Alfonso

Full metadata record

DC FieldValue Language
dc.language.isoen_USen_US
dc.titleThree essays on initial public offerings in Malaysiaen_US
dc.creatorTaufil Mohd, Kamarun Nisham Binen_US
dc.contributor.authorTaufil Mohd, Kamarun Nisham Binen_US
dc.date.issued2004en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThis dissertation is a collection of three essays related to the initial public offerings (IPOs) in Malaysia. The IPO market in Malaysia has historically been tightly regulated. However, with the formation of the Securities Commission (SC) in 1993, the regulations have eased slowly. The first essay investigates the relationship between underpricing and regulations by looking at 546 IPOs from 1990 to 2002. Underpricing refers to the initial return that an investor earns if he buys shares of the IPO at the offer price and sells it at the end of the listing day at the market price. Regulations are measured by the relaxation of the pricing method, the required allocation to indigenous investors, the mechanisms to protect minority shareholders, and the length of time periods. The first three features of regulations are unique to Malaysia. The findings are mixed regarding the relaxation of the pricing guideline in 1995 since it does not lead to lower underpricing for the period from 1996 to November 7, 1997 or before the Asian financial crisis. Fraction of shares set aside for indigenous investors does not affect underpricing; length of time from price setting to listing date relates negatively to underpricing. Finally, the protective mechanisms lead to more underpricing for firms that go public between 1996 and November 6, 1997 or those that go public after 1998, i.e., after the Asian financial crisis. The second essay looks at the relationship between the universal banking facility and the costs of going public for 546 initial public offerings listed on the Kuala Lumpur Stock Exchange from January 1990 to December 2002. It is hypothesized that by sharing private information about a firm that is going public with its affiliated commercial bank, an investment bank could lower the costs of going public for the firm. Costs of going public are measured by the degree of underpricing and gross spread, or the fees paid to the underwriters as a fraction of gross proceeds. The result in this essay is that, for the period under study, firms do not reduce the costs of going public when they use the universal banking facility. The third essay looks at the three-year performance of the IPOs in Malaysia from 1994 to 2000. Evidence from most studies in different countries finds that initial public offerings (IPOs) underperform their benchmarks or matches in the long run. However, our evidence regarding the long run performance of IPOs in Malaysia is that the IPOs do not underperform their matches. The returns of the IPOs are adjusted by using either a market index or firms with similar characteristics to the IPOs. Two different matching estimators are employed to identify the firms of similar characteristics. One of the contributions of this essay is the use of a new methodology to identify the matches for the IPOs. (Abstract shortened by UMI.)en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectEconomics, Finance.en_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.disciplineEconomicsen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorFlores-Lagunes, Alfonsoen_US
dc.identifier.proquest3158163en_US
dc.identifier.bibrecord.b48138198en_US
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