IPO Initial Excess Return in an Emerging Market: Evidence from Vietnam’s Stock Exchanges

Using data from 118 firms listed on the Ho Chi Minh and Hanoi Stock Exchanges from January 1, 2006 to June 30, 2010, we find that Vietnamese IPOs, which face high government regulation, are on average 1.92% underpriced during the initial 30-day trading period. Among these firms, the initial excess r...

Full description

Saved in:
Bibliographic Details
Published in:Review of Pacific basin financial markets and policies 2016-06, Vol.19 (2), p.1650011
Main Authors: Huang, Shaio Yan, Lee, Chao-Hsiung, Pan, Lee-Hsien, Nguyen Thi, Bich Hanh
Format: Article
Language:English
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Using data from 118 firms listed on the Ho Chi Minh and Hanoi Stock Exchanges from January 1, 2006 to June 30, 2010, we find that Vietnamese IPOs, which face high government regulation, are on average 1.92% underpriced during the initial 30-day trading period. Among these firms, the initial excess returns are 3.49%, 2.68%, and 2.27% for the manufacturing, information, and service industries, respectively, possibly due to favorable government policy toward industrialization. Moreover, the government’s policies regarding trade liberalization, state-owned enterprise privatization, and export-led industrialization are positively associated with IPO underpricing during the initial trading period. Consequently, IPO initial excess return is more pronounced in 2007, when Vietnam joined the World Trade Organization.
ISSN:0219-0915
1793-6705
DOI:10.1142/S0219091516500119