Price clustering of IPOs in the secondary market

Abstract

This article studies the integer price clustering of Initial Public Offerings (IPOs) in the secondary market trading during the first 240 trading days after their IPO dates. The results indicate the huge difference between the integer price frequency of IPOs in the primary market and that of matched stocks in the secondary market almost disappears on the first trading day after IPO. The integer price frequency of IPOs is still significantly higher than that of matched stocks during the first 240 trading days. However, after controlling for price level, trading characteristics and IPO price support, the integer price frequency of IPOs conforms to that of matched stocks and that those IPOs with integer offer prices have the same integer price frequency as IPOs without.

Dynamic relationships between industry returns and stock market returns

“…challenge confronting developing Asia during (Jongwanich & Park, 2009, leading results to interpretation problems in using returns denominated in the local currency. In Panel C of Table 2, we control trading activity by including trading activity as an independent variable into the empirical model to evaluate its impact on industry-market returns, which is a manner commonly adopted in previous studies (i.e., Chen, Martin, & Wang, 2012;Wang, 2010). The results in Panel C shows still hold in eight out of eleven industry-leading industries in controlling for trading activity, suggesting that trading activity does not substantially affect the industry leading relation here.…”