An analysis of initial returns of the initial public offerings issued from 1994-2005 based on the category of their lead underwriters: An update

Date of Publication

2006

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

Subject Categories

Finance and Financial Management

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Thesis Adviser

Leila Calderon Kabigting

Defense Panel Member

Joseph James F. Lago
Abener Balatbat
Clive Manuel O. Wee Sit

Abstract/Summary

An initial public offering (IPO) is the first sale of a corporation's common shares to public investors. The main purpose of an IPO is to raise capital for the corporation. While IPOs are effective at raising capital, they also impose heavy legal compliance and reporting requirements. The term only refers to the first public issuance of a company's shares any later public issuance of shares is referred to as a secondary market offering.

The first general requirement for a company to be publicly listed in the Philippine Stock Exchange is to undergo the process of underwriting. Underwriting is the process or act of guaranteeing the sale of distribution of shares by purchasing them from an issuing firm at a stated price and take on the risk of distributing the securities.

The IPOs were perceived to produce abnormal return on its initial trading day. Abnormal return is the excess of the IPO return from the Phisix return. The presence of abnormal return are said to be caused by underpricing. A study was made and made a theory that the presence of abnormal return is affected by the assets of the underwriter of the IPO.

This paper will update the same study and look if there really is a relationship between the presence of abnormal return and the asset of the underwriter. In addition, this paper will also test whether the market capitallization of the issuing company helps produce abnormal returns for the IPOs and if the IPO market do follow a cycle of dramatic swings, often referred to as hot and cold markets.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU21833

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

82, [20] leaves : illustrations

Keywords

Going public (Securities)

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