IPOs Performance Analysis: Evidence from Emerging Markets in the Balkans

Open access

Abstract

The main purpose of this paper is to investigate the performance of initial public offerings (IPOs) in the emerging markets with particular focus on the markets of Balkan countries. The paper provides analysis of long and short performance of IPOs. In the Balkan emerging markets IPOs are relatively rarely used. Although all observed Balkan countries have gone through processes of transition from planned economies to market economies in the past 25 years, just a few state-owned companies have been privatized by use of IPOs. Due to this specific nature of the companies the analyzed sample of IPOs is comprised of state-owned and non-state-owned companies. The results are interpreted and expounded accordingly, taking into consideration the aforementioned conjunction. The findings indicate that company characteristics, signalling variables and financial variables have influence on the IPOs short and long term performance. The paper provides academia and policymakers with new revelations concerning the IPO processes in Balkan emerging economies’ capital markets.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Achua J. K. 2011. The Dynamics of Initial Price Offerings in Deregulated Emerging African Capital Markets. African Journal of Accounting Economics. 7(7) 14-35.

  • Aminul I. Ruhani A. and Zamri A. 2010. An Empirical Investigation of the Underpricing of Initial Public Offerings in the Chittagong Stock Exchange. 2(4) 36-46.

  • Aussenegg W. 2000. Privatization versus private sector initial public offerings in Poland. 4(1/2) 69-99. doi: 10.17578/4-1/2-4

  • Bateni L. and Asghari F. 2014. Study of Factors Affecting the Initial Public Offering (IPO) Price of the Shares on the Tehran Stock Exchange. Research in World Economy 5(2) 68-73. doi: 10.5430/rwe.v5n2p68

  • Bateni L. Roodposhti F. R. Poorzamani Z. and Asghari F. 2014. The Relationship between IPO Price and Liquidity: Empirical Evidences from Iran. 6(6) 226-233. doi: 10.5539/ijef.v6n6p226

  • Berk A. S. and Peterle P. 2015. Initial and Long-Run IPO Returns in Central and Eastern Europe. Emerging Markets Finance & Trade 51(sup6) S42-S60. doi: 10.1080/1540496X.2015.1080555

  • Bicanic I. 1993. Privatization in Croatia. Eastern European Politics and Societies 7(3) 422-439. doi: 10.1177/0888325493007003002

  • Booth J. R. and Chua L. 1996. Ownership dispersion costly information and IPO underpricing. Journal of Financial Economics 41(2) 291-310. doi: 10.1016/0304-405X(95)00862-9

  • Bouis R. 2009. The Short-Term Timing of Initial Public Offerings. Journal of Corporate Finance 15(5) 587-601. doi: 10.1016/j.jcorpfin.2009.07.002

  • Brau J. C. Couch R. C. and Sutton N. K. 2012. The desire to acquire and IPO long-run underperformance. Journal of Financial and Quantitative Analysis 47(3) 493-510. doi: 10.1017/S0022109012000233

  • Bundoo S. K. 2007. An Analysis of Ipos Underpricing in Mauritius. African Journal of Accounting Economics. 1(1) 1-12.

  • Chambers D. and Dimson E. 2009. IPO underpricing over the very long-run. The Journal of Finance 64(3) 1407-1443. doi: 10.1111/j.1540-6261.2009.01468.x

  • Chi J. and Padgett C. 2005. Short-run underpricing and its characteristics in Chinese initial public offering (IPO) markets. Research in International Business and Finance 19(1) 71-93. doi: 10.1016/j.ribaf.2004.10.004

  • Choi S. D. and Nam S. K. 1998. The Short-Run Performance of IPOs of Privately and Publicly-Owned Firms: International Evidence. 2(3) 225-244. doi: 10.17578/2-3-3

  • Donais T. 2002. The Politics of Privatization in Post-Dayton Bosnia. III(1) 3-19.

  • Franičevi V. 1999. Privatization in Croatia. Eastern European Economics 37(2) 5-54. doi: 10.1080/00128775.1999.11648686

  • Galetić L. Omazić M. A. and Bulić A. 2008. Privatization Through Going Public - Case Study of T-Ht. International Journal of Management Cases 10(2) 52-59.

  • Gould J. A. 2003. Out of the Blue? Democracy and Privatization in Postcommunist Europe. Comparative European Politics 1(3) 277-311. doi: 10.1057/palgrave.cep.6110019

  • Gu A. Y. 2003. State ownership firm size and IPO performance: Evidence from Chinese. 21(2) 101-108.

  • Hadzic M. 2002. Rethinking Privatization in Serbia. Eastern European Economics 40(6) 6-23.

  • Hensler D. A. Herrera M. J. and Lockwood L. J. 2000. The performance of initial public offerings in the Mexican stock market. Journal of International Money and Finance 19(1) 93-116. doi: 10.1016/S0261-5606(99)00042-X

  • Hruška D. Vignali C. and Galetić F. 2008. Second Phase of Privatization of INA - Initial Public Offering. International Journal of Management Cases 10(2) 38-42.

  • Husnan S. Hanafi M. M. and Munandar M. 2014. Price Stabilization and Ipo Underpricing: An Empirical Study in The Indonesian Stock Exchange. 29(2) 129-141.

  • Ibbotson R. Sindelar J. and Ritter J. 1988. Initial Public Offerings. Journal of Applied Corporate Finance 1(2) 37-45. doi: 10.1111/j.1745-6622.1988.tb00164.x

  • Ibbotson R. G. 1975. Price Performance of Common Stock New Issues. Journal of Financial Economics 2(3) 235-272. doi: 10.1016/0304-405X(75)90015-X

  • Kenourgios D. F. Papathanasiou S. and Rafail Melas E. 2007. Initial performance of Greek IPOs underwriter's reputation and oversubscription. Managerial Finance 33(5) 332-343. doi: 10.1108/03074350710739614

  • Li X. 2011. Behavioral theories and the pricing of IPOs' discretionary current accruals. Review of Quantitative Finance and Accounting 7(1) 87-104.

  • Logue D. E. 1973. On the Pricing of Unseasoned Equity Issues. Journal of Financial and Quantitative Analysis 8(1) 91-103. doi: 10.2307/2329751

  • Loughran T. and Ritter J. 1995. The new issues puzzle. The Journal of Finance 50(1) 23-51. doi: 10.1111/j.1540-6261.1995.tb05166.x

  • Loughran T. and Ritter J. 2004. Why Has IPO Underpricing Changed Over Time? Financial Management 33(3) 5-37.

  • Loughran T. Ritter J. and Rydqvist K. 1994. Initial public offerings: International insights. Pacific-Basin Finance Journal 2(2-3) 165-199. doi: 10.1016/0927-538X(94)90016-7

  • Mencinger J. 2007. Privatization Experiences in Slovenia. Annals of Public and Cooperative Economics 67(3) 415-428.

  • Mumtaz M. Z. and Maqsood A. A. 2014. Determinants of Underpricing of Initial Public Offerings: Evidence from Pakistan. 6(1) 47-80.

  • Pagano M. Panetta F. and Zingales L. 1998. Why and how Companies Go Public: An Empirical Analysis. The Journal of Finance 53(1) 27-64. doi: 10.1111/0022-1082.25448

  • Peter S. 2007. Performance of initial public offerings and privatized offers Evidence from a developing country. Managerial Finance 33(10) 798-809. doi: 10.1108/03074350710779241

  • Reilly F. K. and Hatfield K. 1969. Investor Experience with New Stock Issues. Financial Analysts Journal 25(5) 73-80. doi: 10.2469/faj.v25.n5.73

  • Ritter J. 1991. The long-run performance of initial public offerings. The Journal of Finance 42(1) 365-394.

  • Ritter J. 1998. Initial public offerings. 2(1) 5-30.

  • Ritter J. 2003. Differences between European and American IPO Markets. European Financial Management 9(4) 421-434. doi: 10.1111/1468-036X.00230

  • Ritter J. and Welch I. 2002. A review of IPO activity pricing and allocations. The Journal of Finance 57(4) 1795-1828. doi: 10.1111/1540-6261.00478

  • Saunders A. 1990. Why are so many new stock issues underpriced? Business Review (Federal Reserve Bank of Philadelphia)(March-April) 3-12.

  • Smith S. C. Cin B. C. and Vodopivec M. 1997. Privatization Incidence Ownership Forms and Firm Performance: Evidence from Slovenia. Journal of Comparative Economics 25(2) 158-179. doi: 10.1006/jcec.1997.1463

  • Su C. and Bangassa K. 2011. Underpricing and long-run performance of Chinese IPOs: The role of underwriter reputation. Financial Markets and Portfolio Management 25(1) 53-74. doi: 10.1007/s11408-010-0152-8

  • Tzifakis N. and Tsardanidis C. 2006. Economic Reconstruction of Bosnia and Herzegovina: The Lost Decade. Ethnopolitics 5(1) 67-84. doi: 10.1080/17449050600576316

  • Vujacic I. and Petrovic Vujacic J. 2011. Privatization in Serbia - Results and Institutional Failures. LVI(191) 89-105. doi: 10.2298/EKA1191089V

  • Wei Leong M. S. and Devi S. S. 2015. IPO Initial Returns and Volatility: A Study in an Emerging Market. 9(3) 71-82.

  • Yi-Shuan C. and Shin-Herng M. C. 2010. On IPO Market Anomalies through the Emerging Stock Market in Taiwan. 9(1) 57-76.

  • Zheng S. X. and Li M. 2008. Underpricing ownership dispersion and aftermarket liquidity of IPO stocks. Journal of Empirical Finance 15(3) 436-454. doi: 10.1016/j.jempfin.2007.08.001

Search
Journal information
Cited By
Metrics
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 325 80 4
PDF Downloads 193 78 3