An analysis on the demand for inital public offerings and its aftermarket performance: Evidence from the Philippine stock market for the period 2000-2010

• Main Authors: Bangayan, Stephanie Denise Y., Legaspi, Rhea Sharmayne Y., Rosario, Earvin T., Vergara, Ada Nadine
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Going public (Securities) > Philippines; Stocks > Philippines; Stock exchanges > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7865
• Institution: De La Salle University

This study aims to establish the relationship between IPO investor demand and its aftermarket performance in the Philippine stock market. The researchers found out that the high demand IPOs earn positive initial returns, while low demand IPOs earn negative initial return. On the contrary, high demand IPOs realize positive long-run excess returns. This result implies that investor demand affects initial and long-run aftermarket performance of IPOs. The result suggests that (1) there has been a high degree of underpricing IPOs in the Philippines which greatly affects IPOs initial performance and, (2) IPOs long-run aftermarket performance would reflect their true value as more information is available to investors.