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Article
Publication date: 26 August 2021

Waqas Mehmood, Rasidah Mohd-Rashid, Abd Halim Ahmad and Saqib Amin

The purpose of this paper was to examine whether or not the sponsor lock-up ratio, lock-up period, regulation changes and interaction variable (oversubscription [OSR]) affected…

Abstract

Purpose

The purpose of this paper was to examine whether or not the sponsor lock-up ratio, lock-up period, regulation changes and interaction variable (oversubscription [OSR]) affected initial public offering (IPO) initial return.

Design/methodology/approach

A complete sample of 111 listed IPOs in Pakistan stock exchange from 1996 to 2018 was incorporated. Based on the cross-section data, this paper estimated using ordinary least square and quantile least square for robustness. In addition to that, this paper estimated the data using stepwise least square to inspect the signalling aspect of the lock-up ratio, lock-up period and regulation changes on IPO initial return.

Findings

This study showed that the lock-up ratio, lock-up period and regulatory changes had a positive impact on the IPO’s initial return. Furthermore, the assertion of interaction variable (regulation changes × OSR) and (lock-up period × OSR) was a negatively significant factor in influencing the IPO’s initial return. The results of this paper were robust to endogeneity bias.

Practical implications

The finding of this study proposed that sponsors of IPOs can be a strong signal of risk or quality, which was consistent with the signalling theory prediction. Concurrently, investors must be aware of the total proportions of lock-up ratio so that they can estimate the chances of getting the highest initial return on IPOs. From the regulators’ point of view, it is suggested that the lock-up ratio and the lock-up period should be determined with a deeper understanding and incorporated into the equity guidelines as it is evident that these factors are priced by the market.

Originality/value

Studies on the effect of sponsors have always been centred on well-recognized firms. Therefore, using the IPO samples listed in Pakistan, this paper contributes to the IPO literature by investigating the lock-up ratio of the sponsor, the lock-up period and the regulatory changes to the initial IPO return. Additionally, OSR has been introduced as an interaction variable among the sponsors’ lock-up period and regulations changes to explain the ongoing IPO initial return phenomenon.

Details

Pacific Accounting Review, vol. 34 no. 1
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 30 July 2021

Rasidah Mohd-Rashid, Ahmad Hakimi Tajuddin, Karren Lee-Hwei Khaw and Chui Zi Ong

This study aims to examine the changes in equity guidelines and initial returns in the Malaysian initial public offering (IPO) market.

Abstract

Purpose

This study aims to examine the changes in equity guidelines and initial returns in the Malaysian initial public offering (IPO) market.

Design/methodology/approach

The study uses cross-sectional data over 16 years from 2000 to 2016. It uses ordinary least squares for the baseline model and incorporates an interaction term, quantile regression, quadratic term, break test and logit regression model for further analysis.

Findings

The results support the propositions that lockup provisions signal commitment and demand increase initial returns. The revision in the Bumiputera equity requirement means that issuers no longer need to discount offer prices to entice investors. Finally, the revised Sharīʿah-compliance screening requirement ensures that stocks are better in quality and more transparent, leading to a higher demand that drives prices upwards.

Research limitations/implications

This study’s findings provide insights into how issuers can secure good subscriptions. Besides, policymakers should ensure that firms disclose the required information in their prospectuses.

Originality/value

This study adds to the body of knowledge on whether and how the regulatory requirements affect IPO initial returns.

Details

Accounting Research Journal, vol. 35 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

Content available
Book part
Publication date: 30 September 2020

Saurav K. Dutta

Abstract

Details

The Definitive Guide to Blockchain for Accounting and Business: Understanding the Revolutionary Technology
Type: Book
ISBN: 978-1-78973-865-0

Book part
Publication date: 10 November 2004

Giancarlo Giudici and Peter Roosenboom

In this chapter we examine the determinants of the long-run stock price performance of Initial Public Offerings (IPOs) on Europe’s new stock markets. We report that the average…

Abstract

In this chapter we examine the determinants of the long-run stock price performance of Initial Public Offerings (IPOs) on Europe’s new stock markets. We report that the average company that went public on these markets has been a very poor long-term investment. We find that the stock price performance during a three-year window is inversely related to first-day returns. We also find that the long-term underperformance of IPO firms begins after the lock-up agreement has expired and insiders start trading in the firm’s shares. These findings are consistent with the divergence of opinion hypothesis of Miller (1977).

Details

The Rise and Fall of Europe's New Stock Markets
Type: Book
ISBN: 978-0-76231-137-8

Article
Publication date: 17 February 2012

Deniz Tudor and Bolong Cao

The purpose of this paper is to examine the ability of hedge funds and funds of hedge funds to generate absolute returns using fund level data.

1336

Abstract

Purpose

The purpose of this paper is to examine the ability of hedge funds and funds of hedge funds to generate absolute returns using fund level data.

Design/methodology/approach

The absolute return profiles are identified using properties of the empirical distributions of fund returns. The authors use both Bayesian multinomial probit and frequentist multinomial logit regressions to examine the relationship between the return profiles and fund characteristics.

Findings

Some evidence is found that only some hedge funds strategies, but not all of them, demonstrate higher tendency to produce absolute returns. Also identified are some investment provisions and fund characteristics that can influence the chance of generating absolute returns. Finally, no evidence was found for performance persistence in terms of absolute returns for hedge funds but some limited evidence for funds of funds.

Practical implications

This paper is the first attempt to examine the hedge fund return profiles based on the notion of absolute return in great details. Investors and managers of funds of funds can utilize the identification method in this paper to evaluate the performance of their interested hedge funds from a new angle.

Originality/value

Using the properties of the empirical distribution of the hedge fund returns to classify them into different absolute return profiles is the unique contribution of this paper. The application of the multinomial probit and multinomial logit models in the fund performance and fund characteristics literature is also new since the dependent variable in the authors' regressions is multinomial.

Article
Publication date: 10 December 2021

Bishal BC and Bo Liu

This paper aims to investigate whether the non-generally accepted accounting principles (GAAP) performance measures (NGMs) disclosure by high-tech initial public offering (IPO…

Abstract

Purpose

This paper aims to investigate whether the non-generally accepted accounting principles (GAAP) performance measures (NGMs) disclosure by high-tech initial public offering (IPO) firms signal firms’ efforts to maintain relatively high stock price levels before the expiration of the lock-up period to benefit insider selling.

Design/methodology/approach

The authors perform ordinary least squares and logit regressions using financial statement data and hand collected data on NGM disclosures for high-tech firms during the IPO process.

Findings

The authors find that the top executives of high-tech IPO firms with NGM disclosures are significantly more likely to sell and sell significantly more insider shares at the lock-up expiration than those of high-tech IPO firms without NGM disclosures. At the same time, while high-tech NGM firms have stock returns similar to their counterparts without NGMs for the period before the lock-up expiration, their stock returns are substantially lower after insider selling following the lock-up expiration.

Practical implications

By documenting the negative association between NGM disclosures and post-lockup expiration stock performance, the study highlights managerial deliberate optimism about the firm’s prospects which may not materialize. Hence, investors should take the NGM disclosures with a grain of salt.

Originality/value

This paper fills a notable void in the non-GAAP reporting literature by documenting a statistically and economically significant positive association between managerial equity trading incentives and NGM disclosures by high-tech IPO firms.

Details

Accounting Research Journal, vol. 35 no. 4
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 8 December 2023

Sven Rehers, Jon Lekander and Ansgar Bernhard Bendiek

This paper compares the benefits of direct international real estate investments in a mixed asset portfolio from the perspective of a passive investor with high and low bond…

Abstract

Purpose

This paper compares the benefits of direct international real estate investments in a mixed asset portfolio from the perspective of a passive investor with high and low bond allocation.

Design/methodology/approach

Due to high data availability and its professionalism, the Norwegian sovereign wealth fund was used as a representative example. Real estate indices from 8 countries were used for the portfolio analysis. The data were desmoothed according to Geltners’s 1993 approach.

Findings

The optimal real estate ratio in the present case is around 20–55%. However, this is strongly dependent on the bond ratio of the multi-asset portfolio. Portfolios with a high equity ratio benefit more from the additional direct real estate investments than portfolios with high bond ratios.

Research limitations/implications

A rebalancing of individual stocks and bonds was not analysed. Only indexes from MSCI (Morgan Stanley Capital International) were available.

Practical implications

Concludes that the weighting of stocks and bonds has a strong influence on the optimal real estate ratio and therefore structural changes that affect this weighting.

Originality/value

The originality of the paper lies in the analysis with different weights of stocks and bonds, the consideration of 8 real estate markets and the observation period. The results of the work highlight areas of interest for further research.

Details

Journal of Property Investment & Finance, vol. 42 no. 1
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 4 March 2014

Yanzhong Wang, Bin Wei, Keyan Ning and Ming Han

This research investigated the mechanism of wet friction plates of engagement and solved the problem that the lock-up friction coefficient of sinter material could not be obtained…

Abstract

Purpose

This research investigated the mechanism of wet friction plates of engagement and solved the problem that the lock-up friction coefficient of sinter material could not be obtained but from experiments for a long time. The paper aims to discuss these issues.

Design/methodology/approach

Including four steps: surface topology sampling and reconstruction, fractal parameters obtaining and fractal surface simulating, micro-contact mechanics model and friction coefficient fractal model, and experimental verification.

Findings

After running in stage of the friction plates, the fractal dimension would reach a dynamically stable stage for a long time. The proportional coefficient K expresses the correlation between the base hardness and the asperities shear strength. The model could be property for one or more working condition via adjusting the coefficient K. The experiment data of friction coefficient are increased as the load magnified both in the model prediction and experiment practice. The trend is different from other models.

Originality/value

This research is original and it is supported by national defense project. It would be served for tracked vehicles to solve the defect in transmission system. The friction coefficient is obtained via solving the tangential force in MB model. The surface topography could be reconstructed by laser topography instrument and the parameters could be received by program.

Details

Industrial Lubrication and Tribology, vol. 66 no. 2
Type: Research Article
ISSN: 0036-8792

Keywords

Book part
Publication date: 24 September 2018

Jonna Bornemark

What happens when we limit our understanding of reason to a calculating competence? In this chapter, I will approach the contemporary introduction of New Public Management (NPM…

Abstract

What happens when we limit our understanding of reason to a calculating competence? In this chapter, I will approach the contemporary introduction of New Public Management (NPM) in the Swedish public sector from the point of view of the fifteenth century philosopher Nicholas of Cusa and his critical analysis of reason and not-knowing. Cusa emphasises not-knowing as something which we cannot and should not avoid. As such it is central to every creation of knowledge. Reason, as the process to gaining knowledge also includes the capacity to relate to not-knowing. In modernity, the understanding of not-knowing has decreased and accordingly changed our understanding of reason. Reason became a calculating capacity, what Cusa calls ratio, rather than a reflecting capacity, what Cusa calls intellectus. The introduction of NPM in the Swedish public sector can, from this point of view, be seen as a kind of ratio-organisation, and I will point out three characteristics of this ratiofication: First, it includes a ‘concept imperialism’, as concepts from outside of the public service-activities displaces concepts that come from within. In this displacement, easily measurable concepts and concepts that frame a measurement-culture displace concepts that belong to the intellect. Second, we can see an ‘empaperment’ when every act has to be documented in order to be counted as complete, and where the empapered world of ratio becomes more central than the lived world with its constant presence of not-knowing. Third, this also results in a ‘remote controlling’ of activities when the acts of the staff are governed from the outside, and the competence to listen to the not-knowing of each situation is not valued.

Article
Publication date: 20 February 2009

Paul B. McGuinness

The purpose of this paper is to provide an updated and critical assessment of the share reforms relevant to Chinese A‐share issuers listed in the two mainland markets of Shanghai…

1563

Abstract

Purpose

The purpose of this paper is to provide an updated and critical assessment of the share reforms relevant to Chinese A‐share issuers listed in the two mainland markets of Shanghai and Shenzhen. The reform programme first began in 2005 and has now spread widely across issuers in the two markets. It is therefore timely to assess how effective the reforms have been as well as gauging the ongoing effects of the transformation (of non‐tradable scrip into tradable form) on A‐share prices.

Design/methodology/approach

The “Split Share Structure” reform programme represents a major policy initiative in China and potentially opens‐the‐door to large‐scale state‐share disposals. The evidence to date however suggests that the Chinese authorities are primarily concerned with the reconfiguration of the array of share types that presently exist into a more comprehendible, streamlined form. The various checks and balances imposed on controlling shareholders engaged in the transformation of their shares from non‐tradable to tradable form suggest that eventual re‐designation of the holdings into an unfettered tradable type will not necessarily translate to the state's acquiescence in the disposal of such shares. On the contrary, state holdings in the most strategic of assets are likely to be retained more or less intact. Insights are developed by focusing on examples involving major A‐share issuers. In particular, a case study of the Sinopec reform proposal of August/September 2006 is set out to help illuminate the principal features of the reform package. Critical examination of the empirical literature relating to the A‐share price effects of the share reform programme also features.

Findings

There is little evidence to date of significant stock disposals amongst the largest and most strategic of China's issuers. However, for a number of A‐listed issuers, parts of the lock‐up moratoria have already expired or are set to do so in the very near future. Given the precipitous fall in A‐share prices (in Shanghai and Shenzhen) since late 2007, largely wrought by the enveloping global credit‐crunch, the Chinese authorities have an even more compelling case than hitherto to assiduously dampen fears of large‐scale state‐share disposals. Notwithstanding this, at least a small part of the drop in A‐share values during 2008 derives from the building risk‐premium on this issue.

Research limitations/implications

As the trading moratoria on re‐designated shares still applies in most cases, at least in respect of the majority of domestic stock holdings, a clearer picture will not emerge until 2009‐2011 when all such moratoria would have lapsed.

Originality/value

The discussions in this paper help to bring into focus a highly topical issue within the context of the Chinese equity market.

Details

Journal of Financial Regulation and Compliance, vol. 17 no. 1
Type: Research Article
ISSN: 1358-1988

Keywords

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