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The Short– and Long–run Performance of New Listings in Tunisia
Author(s) -
Ben Naceur Samy,
Ghanem Hatem
Publication year - 2001
Publication title -
international review of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.489
H-Index - 18
eISSN - 1468-2443
pISSN - 1369-412X
DOI - 10.1111/1468-2443.00028
Subject(s) - initial public offering , stock exchange , listing (finance) , monetary economics , stock market , abnormal return , financial economics , economics , business , stock (firearms) , cross listing , econometrics , finance , geography , corporate governance , context (archaeology) , archaeology
This study examines abnormal stock market returns of new listings on the Tunisian Stock Exchange. Substantial positive abnormal returns are found on the first listing day and this finding is similar to that obtained in other countries. Subsequent performance is poor and investors who bought shares at the close of trading on the first day would have lost about 22% against the Tunis Stock Exchange index over a three–year period. The possible causes of this are investigated. Among the factors found in the literature that possibly affect the level of long–term performance, only the state of the IPO market, the initial return, the delay in reaching the ‘first market price’ and the size of the firms have significant coefficients. This result is supportive of the traditional fad’s interpretation of long–term underperformance.