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The Timing and Subsequent Performance of Initial Public Offerings (IPOs) on the Johannesburg Stock Exchange
Author(s) -
Page Reyneke Michael J., Ivan
Publication year - 1997
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/1468-5957.t01-1-00170
Subject(s) - initial public offering , stock exchange , business , equity (law) , stock (firearms) , sample (material) , accounting , public offering , monetary economics , finance , economics , political science , law , mechanical engineering , engineering , chemistry , chromatography
Companies that have listed on the Johannesburg Stock Exchange by means of a public offering between 1980 and 1991 have subsequently performed poorly. This long run post issue performance is remarkably consistent with the South African evidence for seasoned rights issuing companies and the international evidence for both initial public offerings (IPOs) and seasoned equity offerings (SEOs). Over the four years post issue, the newly listed companies earned an average return of 18.0% as opposed to 81.5% for a size‐matched sample of seasoned companies. This study adds to the increasing body of international evidence suggesting the IPO under performance ‘puzzle’ referred to by Ibbotson (1975), Loughran and Ritter (1995) and Spiess and Affleck‐Graves (1995) is not simply sample or country specific.