Price Stabilization and Ipo Underpricing: An Empirical Study in the Indonesian Stock Exchange

Husnan, Suad; Hanafi, Mamduh M.; Munandar, Muhammad Arif

doi:10.22146/jieb.6205

Cited by 5 publications

(5 citation statements)

References 13 publications

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“…The test results indicate the underpricing phenomenon in IPO performance in Indonesia during the Hot Market period. The results of these tests were in line with studies conducted by Husnan et al (2015), Irfani (2014), Warganegara and Warganegara (2014). The results of this study also support Ritter and Welch's (2002) theory of investor's sentiment, where the initial return will increase if investors are enthusiastic and give a positive reaction.…”

Section: Discussionsupporting

confidence: 89%

“…The underpricing phenomenon often occurs during IPOs. The results of previous studies have documented the occurrence of underpricing of IPO shares on the IDX (Husnan et al, 2015;Irfani, 2014;Warganegara & Warganegara, 2014). The results of Warganegara and Warganegara's (2014) study show the occurrence of underpricing of IPO shares on the IDX in the "Hot Market" periods of 2001 and 2002, where the "Hot Market" periods were marked by the large number of new companies that carried out IPOs in the "Hot Market" periods of 2001 to 2005.…”

Section: Ipo Initial Returnmentioning

confidence: 94%

“…Previous studies in Indonesia have explained that there is a possibility of underpricing during the "Hot Market" period (Warganegara & Warganegara, 2014). A study conducted by Husnan, Hanafi, and Munandar (2015) shows that on average underpricing occurs as much as 23% of the 231 IPO companies on the IDX for the period 1995 to 2012. The results of Irfani's (2014) study which measured underpricing using a long period of return on shares of companies that conducted IPO in 2008-2010 showed that 84.31% of them experienced underpricing even after three years since the IPO.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Analysis of IPO Performance in Indonesia in the "Hot Market" Period and Its Influencing Factors

Agustina

Meyliana

Joni

2021

JASET

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The aim of this study is to test whether there is an underpricing phenomenon within the Hot Market period in Indonesian public companies in 2018. Among 56 companies which conducted IPOs, our descriptive statistical analysis shows 53 companies experienced underpricing and the rest experienced overpricing. We used nonparametric statistic to calculate the average of initial return, and multiple linear regression to test the effect of independent variables on the initial return. The result shows that the underpricing phenomenon occurred in IPO performance in Indonesia. Meanwhile, the results of hypothesis testing show that the company’s age and the underwriter’s reputation had no effect on initial return, while company’s size and market sentiment show a significant negative effect on initial return.

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Section: Discussionsupporting

confidence: 89%

Section: Ipo Initial Returnmentioning

confidence: 94%

Section: Introductionmentioning

confidence: 99%

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Analysis of IPO Performance in Indonesia in the "Hot Market" Period and Its Influencing Factors

Agustina

Meyliana

Joni

2021

JASET

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“…In addition, it is described that when firms go public, it is important to be underpriced rather than monitoring of IPOs. In line with this, Husnan et al (2014) found that underwriters are the only source to stabilize most expensive IPOs along with the most efficient measure of stabilization for closing price of first thirty trading days that are equal to offer price. Darmadi and Gunawan (2013) attempted to explore the association of board structure and corporate ownership with underpricing.…”

Section: Significant Determinants Of Ipos Underpricing In Emerging Ma...mentioning

confidence: 71%

A Review of IPO Underpricing: Evidences from Developed, Developing and Emerging Markets

Mehmood,

Mohd Rashid,

Tajuddin

2021

JCIT

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The empirical evidence of high initial return from Initial Public Offerings (IPO) phenomena known as underpricing. From last three decades, it is an ongoing issue of every financial market throughout the world. We review underpricing research in developed, developing and emerging markets. In this regard, a thorough review of existing literature has been done. In result, higher underpricing of IPOs is found in emerging markets than developing and developed market because in emerging market issuer of IPOs takes underpricing as a signal of their quality IPOs, where information asymmetry is a significant element. Furthermore, based on the review, we managed to pinpoint significant factors that influenced the initial return. However, scale of underpricing among different countries varies depending on the factors, discussed in detail. Various theories and proposition have developed in these three markets to elucidate the phenomena of underpricing. We believe that there exist few factors that could be used as the primary determinants of IPO underpricing in future. These factors are country specific environment, micro and macro-economic factors, quality of legal framework based on listing regulations, and socio-political factors and marketing of IPO, which could provide a promising area of research.

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“…The late spill-over effect is evident from the IPOs performed in 2008 in the markets of Slovenia and Bosnia and Herzegovina. Husnan et al (2014) widely practiced formulas for the empirical analysis of IPOs performance were used in this paper. The estimation of the initial premium to the investors i.e.…”

Section: Data and Research Methodologymentioning

confidence: 99%

IPOs Performance Analysis: Evidence from Emerging Markets in the Balkans

Karanović¹,

Karanović²

2016

Scientific Annals of Economics and Business

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Price Stabilization and Ipo Underpricing: An Empirical Study in the Indonesian Stock Exchange

Abstract: We attempt to investigate IPO underpricing

Cited by 5 publications

References 13 publications

Analysis of IPO Performance in Indonesia in the "Hot Market" Period and Its Influencing Factors

Analysis of IPO Performance in Indonesia in the "Hot Market" Period and Its Influencing Factors

A Review of IPO Underpricing: Evidences from Developed, Developing and Emerging Markets

IPOs Performance Analysis: Evidence from Emerging Markets in the Balkans

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