Initial public offers in Thailand, 1988-1989: price and return patterns

Abstract

This study attempts to find out whether there are excess returns on Initial Public Offers (IPOs). during January 1988 and June 1989, relative to the market and whether excess returns, if any, are justified due to uncertainty of companies with public offerings, and also whether the secondary market quickly establishes a market price, corresponding to the value of the firm. Thirty two initial public offers were taken into consideration. The results for the price pattern suggest higher price than the market for different time intervals in the secondary market both on the individual issues and on average when compared with the offer price.