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Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs

In Malaysia, new issues are reported to be highly underpriced which subsequently led to oversubscription. Since underpricing in the Malaysia capital market has been unique with the regulatory effect (Ariff et.al.), this study extend regulatory intervention effect, namely the New Economic Policy (...

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Main Author: Foo, Yuen Ling
Format: Thesis
Language:English
English
Published: 1999
Online Access:http://psasir.upm.edu.my/id/eprint/7936/1/GSM_1999_42_A.pdf
http://psasir.upm.edu.my/id/eprint/7936/
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spelling my.upm.eprints.79362012-12-13T08:43:21Z http://psasir.upm.edu.my/id/eprint/7936/ Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs Foo, Yuen Ling In Malaysia, new issues are reported to be highly underpriced which subsequently led to oversubscription. Since underpricing in the Malaysia capital market has been unique with the regulatory effect (Ariff et.al.), this study extend regulatory intervention effect, namely the New Economic Policy (NEP) in the period of 1970- 1990 and Disclosure-Based System from 18t January 1996 on Malaysian IPOs. Comparison on pre- and post- policy implementation results show that the average market-adjusted return on both short run and long run period are higher in the postpolicy period. In the short run, the results of average market-adjusted returns in preversus the post- NEP are 52.35 versus 112.01 on first day (t=3.25), 57.63 versus 105.78 on first week (t=2.61), 62.89 versus 106.09 on first month (t=2.24), 46.41 versus 105.06 (t=2.89) on third month and 37.28 versus 106.71(t=3.55) on the sixth month. In the long run, the average market-adjusted returns of pre-versus the postNEP are 21.19 versus 108.89 (t=9.24) on the first year, -4.79 versus 97.18 (t=6.57) on second year and 6.94 versus 73.41 (t=5.74) on the third year. Implementation of disclosure-based system has significantly reduced the underpricing. The results of average market-adjusted returns of pre-and postimplementation of the system are 139.65 versus 1.39 on first day (t=I1.60), 140.26 versus 1.34 (t=1O.56) on first week, 136.08 versus 1.33 (t=1O.08) on first month and 147.93 versus 1.69 (t=10.09) on sixth month. Therefore, the study concluded that regulations do have effect on Malaysian IPOs. 1999 Thesis NonPeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/7936/1/GSM_1999_42_A.pdf Foo, Yuen Ling (1999) Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs. Masters thesis, Universiti Putra Malaysia. English
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
English
description In Malaysia, new issues are reported to be highly underpriced which subsequently led to oversubscription. Since underpricing in the Malaysia capital market has been unique with the regulatory effect (Ariff et.al.), this study extend regulatory intervention effect, namely the New Economic Policy (NEP) in the period of 1970- 1990 and Disclosure-Based System from 18t January 1996 on Malaysian IPOs. Comparison on pre- and post- policy implementation results show that the average market-adjusted return on both short run and long run period are higher in the postpolicy period. In the short run, the results of average market-adjusted returns in preversus the post- NEP are 52.35 versus 112.01 on first day (t=3.25), 57.63 versus 105.78 on first week (t=2.61), 62.89 versus 106.09 on first month (t=2.24), 46.41 versus 105.06 (t=2.89) on third month and 37.28 versus 106.71(t=3.55) on the sixth month. In the long run, the average market-adjusted returns of pre-versus the postNEP are 21.19 versus 108.89 (t=9.24) on the first year, -4.79 versus 97.18 (t=6.57) on second year and 6.94 versus 73.41 (t=5.74) on the third year. Implementation of disclosure-based system has significantly reduced the underpricing. The results of average market-adjusted returns of pre-and postimplementation of the system are 139.65 versus 1.39 on first day (t=I1.60), 140.26 versus 1.34 (t=1O.56) on first week, 136.08 versus 1.33 (t=1O.08) on first month and 147.93 versus 1.69 (t=10.09) on sixth month. Therefore, the study concluded that regulations do have effect on Malaysian IPOs.
format Thesis
author Foo, Yuen Ling
spellingShingle Foo, Yuen Ling
Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
author_facet Foo, Yuen Ling
author_sort Foo, Yuen Ling
title Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_short Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_full Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_fullStr Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_full_unstemmed Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_sort empirical study on regulatory effect of national economic policy and disclosure-based system on malaysian ipos
publishDate 1999
url http://psasir.upm.edu.my/id/eprint/7936/1/GSM_1999_42_A.pdf
http://psasir.upm.edu.my/id/eprint/7936/
_version_ 1643823870072848384
score 13.211869

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