Short Run And Long Run Performance Of Initial Public Offerings In State Owned And Non- State Owned Enterprises Of Pakistan
Author: Henna

This empirical study investigates the comparison of short and long run-aftermarket performance of state owned and non-state owned initial public offerings issued at Karachi Stock Exchange, with the total sample of 72 IPOs out of which 61 are non-state enterprises and 11 state owned enterprises during the period of Mar 2000- June, 2015. The study finds that both group of IPOs outperforms on first trading day, as average initial market adjusted returns of SOE and Non-SOE IPOs are 27.65% and 22.53% respectively. But the mean difference of both IPOs is not statistical significant and in contrast of asymmetric information theory. In long run after market performance buy and hold abnormal returns of SOE and Non-SOE IPOs are 80.457% and -91.866% respectively, which shows outperformance of SOE while underperformance of Non-SOE in the long run. Values of SOE and the mean difference values of both groups of IPOs is not statistically significant. By using cross sectional multiple variables with OLS estimation technique, this research also reveals the factors that can significantly influence the underpricing, aftermarket long run performance of IPOs and comparison of association between underpricing and ownership structure of SOE and Non-SOE IPOs. Regression results unveil that firm size, after market-risk level of IPO and subscription ratio are significant factors of underpricing while, first day return, market-volatility and retained ownership are significant factors of aftermarket over 5-year long-run performance. The study also finds that ownership concentration in both SOE and Non-SOE IPOs is similar, and underpricing is negative and significantly related with ownership concentration while firm size and after market risk of issue and ROA also effects ownership concentration Supervisor:- Dr. Attiya Yasmin Javid

Meta Data

Keywords : Aftermarket Performance, Initial Public Offering, Non SOE, Outperformance, SOE, Under-pricing, Underperformance
Supervisor: Attiya Yasmin Javid

Related Thesis​