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Short Run Underpricing of Initial Public Offering (IPOs) in the Johannesburg Stock Exchange (JSE)

23 April 2013
Publication Type: Working Paper
JEL Code: C12, C13, G0

The underpricing of initial public offerings (IPOs) represents one of the anomalies observed in primary markets worldwide, however, the depth and breadth of it varies from country to country, and sector to sector. This study is an empirical analysis of short run performance of IPOs in the Johannesburg StockExchange (JSE). Using data for 138 South African IPOs that were listed on the JSE from 2006 to 2010, we found significant short run underpricing. A sector wise analysis of three broad sectors indicated that the financial sector had the largest IPO underpricing, particularly evident in 2007. The year-wise analysis is also documented.

Series title: Working paper 344
1 April 2013
Journal: Review of Development Finance
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