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3. Graduate School of Business / Pusat Pengajian Siswazah Perniagaan

Title:	IPO underpricing and intended use of proceeds
Authors:	Chan Siew Lian (ZP00068)
Supervisor:	Izani Ibrahim, Prof. Dr.
Keywords:	Initial public offerings (Securities) Bursa Malaysia Universiti Kebangsaan Malaysia -- Dissertations Dissertations, Academic -- Malaysia
Issue Date:	25-Oct-2019
Description:	Past studies have indicated that the underpricing of IPOs seemed to be attributed to the information that was disclosed in the prospectus. Among the information that can be found in prospectus is the firm's intended use of proceeds. As the information on the intended use of proceeds gets more detailed, it lowered the asymmetric of information and hence lowered the IPO underpricing. This study aims to establish if there is a positive relationship between the intended use of proceeds and IPO underpricing. This study also extends the research on whether firm specific factors (firm age and firm size) and underwriter reputation has an effect on the relationship between the intended use of proceeds and IPO underpricing. To achieve the objective, a cross-sectional analysis was performed on a 505 IPO firms listed on Bursa Malaysia from 2000 to 2015. A simple linear regression model is used to ascertain the relationship between each of the intended use of proceeds and IPO underpricing. IPO underpricing is measured by the percentage difference between offer price and first-day opening price (UPOPEN) and the percentage difference between offer price and first-day closing price (UPCLOSE). The intended use of proceeds is categorized into four groups: investment for growth activities (CAPEX, R&D, M&A), financing activities (WC, DEBT), owner cash out (OWNC) and general purpose (GP). This study found that IPO underpricing (UPOPEN and UPCLOSE) still exists in Malaysia but it is on the decline. The results also showed an inconsistent positive relationship between each of the intended use of proceeds and IPO underpricing. Firm age and firm size also do not show significant effect on the relationship between each of the intended use of proceeds and IPO underpricing. There were no significant influences between prestigious and less prestigious underwriter on each of the intended use of proceeds and IPO underpricing. Having considered the evidence based on the intended use of proceeds, firm age, firm size and underwriter reputation, this study concluded that there is no real impact of the relationship between IPO underpricing and the foregoing factors. The asymmetric information and signaling theories do not explain the results in this research.,Ph.D
Pages:	187
Call Number:	HG4028.S7.C486 2019 tesis
Publisher:	UKM, Bangi
Appears in Collections:	Graduate School of Business / Pusat Pengajian Siswazah Perniagaan

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