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Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence

This paper examines the effects of the lock-up period and shareholder retention ratio on the heterogeneity of investors beliefs regarding the true value of IPOs in the Malaysian IPO market. The relationship between the signalling variables and the first-day price range of IPOs is examined using a qu...

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Main Authors: Albada, Ali, Low, Soo Wah, Yong, Othman, Md Nassir, Annuar, Kamarudin, Fakarudin, Mohamad Anwar, Nazratul Aina
Format: Article
Language:English
Published: Fakulti Ekonomi dan Pengurusan, Universiti Putra Malaysia 2019
Online Access:http://psasir.upm.edu.my/id/eprint/80059/1/17%29%20Heterogeneity%20of%20opinion.pdf
http://psasir.upm.edu.my/id/eprint/80059/
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spelling my.upm.eprints.800592023-08-07T08:43:07Z http://psasir.upm.edu.my/id/eprint/80059/ Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence Albada, Ali Low, Soo Wah Yong, Othman Md Nassir, Annuar Kamarudin, Fakarudin Mohamad Anwar, Nazratul Aina This paper examines the effects of the lock-up period and shareholder retention ratio on the heterogeneity of investors beliefs regarding the true value of IPOs in the Malaysian IPO market. The relationship between the signalling variables and the first-day price range of IPOs is examined using a quantile regression (QR) technique. This study employs a sample of 377 IPOs issued between January 2000 and December 2015. The results show that shareholder retention ratio has a significant negative relationship with the first-day price range, while the lock-up period does not have a significant relationship with the first-day price range. This suggests that prospective investors acknowledge the importance of the shareholder retention ratio as a signal and use the information conveyed by this signal to evaluate the price of the listing firm’s IPO and to ensure that the current price reflects their beliefs and expectations of the firm in general and the issue price in particular. Finally, the lock-up in the Malaysian market serves as precautionary measure to guard the investors against after-market insiders’ actions. Fakulti Ekonomi dan Pengurusan, Universiti Putra Malaysia 2019 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/80059/1/17%29%20Heterogeneity%20of%20opinion.pdf Albada, Ali and Low, Soo Wah and Yong, Othman and Md Nassir, Annuar and Kamarudin, Fakarudin and Mohamad Anwar, Nazratul Aina (2019) Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence. International Journal of Economics and Management, 13 (1). pp. 231-248. ISSN 1823-836X chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/http://www.ijem.upm.edu.my/vol13no1/17)%20Heterogeneity%20of%20opinion.pdf
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
description This paper examines the effects of the lock-up period and shareholder retention ratio on the heterogeneity of investors beliefs regarding the true value of IPOs in the Malaysian IPO market. The relationship between the signalling variables and the first-day price range of IPOs is examined using a quantile regression (QR) technique. This study employs a sample of 377 IPOs issued between January 2000 and December 2015. The results show that shareholder retention ratio has a significant negative relationship with the first-day price range, while the lock-up period does not have a significant relationship with the first-day price range. This suggests that prospective investors acknowledge the importance of the shareholder retention ratio as a signal and use the information conveyed by this signal to evaluate the price of the listing firm’s IPO and to ensure that the current price reflects their beliefs and expectations of the firm in general and the issue price in particular. Finally, the lock-up in the Malaysian market serves as precautionary measure to guard the investors against after-market insiders’ actions.
format Article
author Albada, Ali
Low, Soo Wah
Yong, Othman
Md Nassir, Annuar
Kamarudin, Fakarudin
Mohamad Anwar, Nazratul Aina
spellingShingle Albada, Ali
Low, Soo Wah
Yong, Othman
Md Nassir, Annuar
Kamarudin, Fakarudin
Mohamad Anwar, Nazratul Aina
Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence
author_facet Albada, Ali
Low, Soo Wah
Yong, Othman
Md Nassir, Annuar
Kamarudin, Fakarudin
Mohamad Anwar, Nazratul Aina
author_sort Albada, Ali
title Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence
title_short Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence
title_full Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence
title_fullStr Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence
title_full_unstemmed Heterogeneity of opinion, shareholder retention ratio and lockup period: Malaysian evidence
title_sort heterogeneity of opinion, shareholder retention ratio and lockup period: malaysian evidence
publisher Fakulti Ekonomi dan Pengurusan, Universiti Putra Malaysia
publishDate 2019
url http://psasir.upm.edu.my/id/eprint/80059/1/17%29%20Heterogeneity%20of%20opinion.pdf
http://psasir.upm.edu.my/id/eprint/80059/
_version_ 1775624488194408448
score 13.211869

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