New Evidence on the Pricing and Performance of Initial Public Offerings in Thailand: 1997–2008

23 Pages Posted: 27 Aug 2009

See all articles by Jirapun Anne Chorruk

Jirapun Anne Chorruk

Griffith University - Department of Accounting, Finance and Economics

Andrew C. Worthington

Griffith University

Date Written: June 17, 2009

Abstract

This paper examines the pricing and performance of initial public offerings (IPOs) in the Stock Exchange of Thailand (SET) from February 1997 to October 2008. Underpricing is calculated using headline underpricing, underpricing issuer loss, underpricing loss by market value, and underpricing loss by issuer price. The results show that average underpricing of 17.60%, 5.01%, 6.94%, 6.68% and 16.10%, respectively. This is a significantly lower level of underpricing than previously documented in Thailand before the 1997 Asian financial crisis. Post-listing performance is assessed using monthly cumulative abnormal returns, buy-and-hold returns and wealth relatives. The findings show that Thai IPOs generally outperform market benchmarks up to 24 months and underperform thereafter up to 36 months. However, there is much variation in long-run performance among industries. For example, multiple regression analysis shows that IPOs in the financial services industry perform relatively better in the longer run.

Keywords: initial public offerings, underpricing, abnormal returns

JEL Classification: C12, C23, G24, G32

Suggested Citation

Chorruk, Jirapun Anne and Worthington, Andrew C., New Evidence on the Pricing and Performance of Initial Public Offerings in Thailand: 1997–2008 (June 17, 2009). 22nd Australasian Finance and Banking Conference 2009. Available at SSRN: https://ssrn.com/abstract=1421598 or http://dx.doi.org/10.2139/ssrn.1421598

Jirapun Anne Chorruk (Contact Author)

Griffith University - Department of Accounting, Finance and Economics ( email )

PMB 50
Gold Coast Queensland 9726
Australia

Andrew C. Worthington

Griffith University ( email )

170 Kessels Road
Nathan, Queensland 4111
Australia
+61 (0)7 3735 4273 (Phone)
+61 (0)7 3735 3719 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
112
Abstract Views
852
rank
243,646
PlumX Metrics