Impact of Risk Disclosure in the Prospectus on Valuation and Initial Returns of Initial Public Offerings in Malaysia

Drawing upon risk-return and signaling literature, this paper tests the relationship between Initial Public Offering (IPO) risk disclosed in the prospectus and its offer price and initial market returns. Based on 210 samples of IPOs offered in Malaysian stock market during the period 1999-2004, weig...

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Published inThe ICFAI journal of applied finance Vol. 16; no. 6; p. 30
Main Authors Murugesu, John, Santhapparaj, A Solucis
Format Journal Article
LanguageEnglish
Published Hyderabad IUP Publications 01.10.2010
Subjects
Asymmetry
Capital assets
Capital markets
Disclosure
Equity
Impact analysis
Initial public offerings
Investment policy
Investments
Market prices
Rates of return
Regression analysis
Risk aversion
Risk exposure
Risk management
Stockholders
Studies
Valuation
Malaysia
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Abstract Drawing upon risk-return and signaling literature, this paper tests the relationship between Initial Public Offering (IPO) risk disclosed in the prospectus and its offer price and initial market returns. Based on 210 samples of IPOs offered in Malaysian stock market during the period 1999-2004, weighted least-square regression analysis (book value of the company after the IPO as weight) has been applied. The results indicate that the prospectus does provide risk information that reflects offer price and initial market returns. [PUBLICATION ABSTRACT]
AbstractList Drawing upon risk-return and signaling literature, this paper tests the relationship between Initial Public Offering (IPO) risk disclosed in the prospectus and its offer price and initial market returns. Based on 210 samples of IPOs offered in Malaysian stock market during the period 1999-2004, weighted least-square regression analysis (book value of the company after the IPO as weight) has been applied. The results indicate that the prospectus does provide risk information that reflects offer price and initial market returns. [PUBLICATION ABSTRACT]
Author Murugesu, John
Santhapparaj, A Solucis
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Snippet Drawing upon risk-return and signaling literature, this paper tests the relationship between Initial Public Offering (IPO) risk disclosed in the prospectus and...
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StartPage 30
SubjectTerms Asymmetry
Capital assets
Capital markets
Disclosure
Equity
Impact analysis
Initial public offerings
Investment policy
Investments
Market prices
Rates of return
Regression analysis
Risk aversion
Risk exposure
Risk management
Stockholders
Studies
Valuation
Title Impact of Risk Disclosure in the Prospectus on Valuation and Initial Returns of Initial Public Offerings in Malaysia
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