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The financial performance of Saudi Arabian IPOs

Ahmed S. Alanazi (Department of Accounting, Finance and Economics, Griffith Business School, Griffith University, Brisbane, Australia)
Benjamin Liu (Department of Accounting, Finance and Economics, Griffith Business School, Griffith University, Brisbane, Australia)
John Forster (Department of Accounting, Finance and Economics, Griffith Business School, Griffith University, Brisbane, Australia)

International Journal of Islamic and Middle Eastern Finance and Management

ISSN: 1753-8394

Article publication date: 21 June 2011

2365

Abstract

Purpose

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The main objective of this paper is to measure Saudi Arabian initial public offerings' (IPOs) financial performance before and after going public on the Saudi Stock Exchange Market. The paper also aims to explore factors associated with the financial performance variation between pre‐ and post‐IPO.

Design/methodology/approach

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A sample of 16 Saudi IPOs is investigated. A matched pairs methodology is mainly used combined with regression analysis.

Findings

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Saudi IPOs exhibit a significant decline in the post‐IPO performance compared to the pre‐IPO level as measured by the return on assets and return on sales. It was also found that the performance deterioration is associated with the IPO event.

Originality/value

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The paper is the first assessment of IPOs clustering occurred in Saudi Arabia.

Keywords

Citation

Alanazi, A.S., Liu, B. and Forster, J. (2011), "The financial performance of Saudi Arabian IPOs", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 4 No. 2, pp. 146-157. https://doi.org/10.1108/17538391111144533

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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