The long run performance of UK firms making multiple rights issues

Iqbal, Abdullah; Akbar, Saeed; Shiwakoti, Radha K.

doi:10.1016/j.irfa.2013.03.003

Cited by 3 publications

(4 citation statements)

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“…Empirical evidence on price effects of equity issues was seminally analysed by Loughran and Ritter (1995) and Spiess and Affleck-Graves (1995). Subsequently, a number of other studies have extensively examined mature markets such as the US (Gao and Ritter, 2010;Henry and Koski, 2010;Alti and Sulaeman, 2012;and Bradley and Yuan, 2013), the UK (Slovin et al, 2000;Capstaff and Fletcher, 2011;Iqbal et al, 2013;Armitage et al, 2014;and Silva and Bilinski, 2015), France (Ginglinger et al, 2012), Spain (Martín-Ugedo, 2003;and Alvarez and Gonzalez, 2005), Japan (Suzuki and Yamada, 2012), Australia (Lamberto and Rath, 2010), and others. Most of the recent studies in this area of research have been encouraged to a large extent by the increased interest in equity issues worldwide.…”

Section: Introductionmentioning

confidence: 99%

Market Reaction to Seasoned Offerings in China

Liu¹,

Akbar²,

Shah³

et al. 2016

Business Fin & Account

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This study examines stock market reaction to the announcement of various forms of seasoned issues in China. Our empirical evidence demonstrates that market reactions differ in ways that suggest a difference between management's internal assessment and the market's assessment of the stock price. The market responds unfavourably to the announcement, notably in the case of rights issues and also with regard to open offers. Private placements experience an unfavourable pre-announcement reaction, which contrasts with the favourable reaction after the event. Convertible bond issues generate positive excess returns consistent with the market's confidence that they can help to align management and shareholders' interests. Further investigation shows that market reaction is related to factors specific to the issuer and issue by reference to the period immediately surrounding the issue. Specifically, ownership concentration, agency matters connected with equity offerings, investor protection connected with fund allocation and security pricing, and the influence of powerful moneyed interests together provide an instructive insight into market reaction. Institutional inefficiency pertaining to underwriting, auditing, analysts' forecasts and credit ratings are found to have a weak association with market price, consistent with due public scepticism concerning management and their gatekeepers.

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Section: Introductionmentioning

confidence: 99%

Market Reaction to Seasoned Offerings in China

Liu¹,

Akbar²,

Shah³

et al. 2016

Business Fin & Account

Self Cite

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“…These follow-on or seasoned equity offerings (SEOs) can either involve public offerings, private placements, or a combination of both. Prior studies have extensively explored these SEO deals from the perspective of stock liquidity (Butler et al, 2005;Lin and Wu, 2013), profitability (Fu, 2010), performance (Andrikopoulos, 2009;DeAngelo et al, 2010;Ritter, 1995, 1997;Ngatuni et al, 2007;Spiess and Affleck-Graves, 1995;) and how markets perceive them (Iqbal, 2008;Iqbal et al, 2013;Loughran and Ritter, 1997;and Walker et al, 2016). However, only a few researchers have explored serial or multiple SEOs by the same firm (D'Mello et al, 2003, Iqbal, 2008, Iqbal et al, 2013, and Walker et al, 2016.…”

Section: Introductionmentioning

confidence: 99%

“…Taking into consideration the differences between AIM and MM, this study explores the impact of serial equity issues by the same issuer on capital structure. Prior literature establishes that a non-negligible proportion of firms conduct SEOs (Iqbal et al, 2008(Iqbal et al, , 2013Walker et al, 2016). Based on the reported prior evidence our first hypothesis is:…”

mentioning

confidence: 99%

“…His study provides evidence that the decline in information asymmetry is the reason behind the less negative market reaction at or after the third rights issue announcement. Relatedly,Iqbal et al (2013) study the long-run performance of UK firms conducting multiple right issues between 1988 and 2008. Their analysis provides evidence that 53% of the rights issues in the UK are conducted by firms which make two or more issues during the sample period.…”

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confidence: 99%

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