Determining of IPO under-pricing in the Philippines from 2002-2012

• Main Authors: Catada, Kevin Cyrus, Chan, Windell, Perez, Christian, Tambis, Ryan
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Going public (Securities) > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18448
• Institution: De La Salle University

Initial public offering is a way for companies to go public and raise capital through equity for their projects. Under-pricing of an IPO occurs when the market value of the stock is greater than its offer price during its IPO. This research documents and analyses the determinants of under-pricing which are: market capitalization, market volatility, offer size, proportion of shares offered (PSO) to the public and PE ratio. All investors in an IPO are affected by under-pricing. The research can help in understanding the determinants of under-pricing duirng IPOs in the Philippine market and identify those which factors cause a firm to under-price its offer. Using OLS regression, this research is able to conclude that market volatility had significant effect on under-pricing while market capitalization, offer size, PSO and PE ratio had insignificant effect on under-pricing.