Impact of IPO lockup expirations and its determinants: Malaysian evidence

This dissertation examines the impact of lockup expiration and its determinants in Malaysia using 292 IPOs during the period 2003-2012. Impact of lockup on abnormal returns, impact of lockup on abnormal trading volume, impact of regulatory changes on abnormal returns, and determinants of share price...

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Main Author:	Shamsul Bahrain, Mohamed Arshad
Format:	Thesis
Language:	eng eng
Published:	2016
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/6360/1/s90586_01.pdf https://etd.uum.edu.my/6360/2/s90586_02.pdf
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id	my-uum-etd.6360
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Taufil Mohd, Kamarun Nisham Ahmad Zaluki, Nurwati Ashikkin
topic	HG Finance
spellingShingle	HG Finance Shamsul Bahrain, Mohamed Arshad Impact of IPO lockup expirations and its determinants: Malaysian evidence
description	This dissertation examines the impact of lockup expiration and its determinants in Malaysia using 292 IPOs during the period 2003-2012. Impact of lockup on abnormal returns, impact of lockup on abnormal trading volume, impact of regulatory changes on abnormal returns, and determinants of share price behavior as a proxy of abnormal returns at lockup expiration are the four study objectives. The research hypotheses are tested using event study method and multiple regressions. Results show the existence of significant negative abnormal returns surrounding the date of lockup expirations, hence contradicting evidence of the efficient market hypothesis. Further, this study also finds the existence of abnormal trading volumes. Both of these results are in line with those of the US studies. Meanwhile, there are two lockup regimes involved in this study arising from regulatory change that takes effect on 1 May 2003 and 3 August 2009, referred to as Regime #I and Regime #2, respectively. However, the results show that the change in lockup regulation does not have an impact on the abnormal returns at lockup expiration. Furthermore, the variables identified in the regression analysis are lockup regime, fractions of insiders buying and selling before and after expiration, company size and age, offer price, underwriter, auditor, and technology company. Results show that company size, fraction of insider selling and buying after lockup expiration are the significant factors in relations to abnormal returns which is driven by Regime #l. Implications of the study to SC are improving the present regulation by imposing the minimum requirement and allowing for longer lockup period to be determined between underwriter and IPO issuer, to Bursa Malaysia in posting the upcoming lockup expiration dates on their website to alert investors, and to research houses by starting coverage on earnings forecast and providing recommendations surrounding lockup expiration.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Shamsul Bahrain, Mohamed Arshad
author_facet	Shamsul Bahrain, Mohamed Arshad
author_sort	Shamsul Bahrain, Mohamed Arshad
title	Impact of IPO lockup expirations and its determinants: Malaysian evidence
title_short	Impact of IPO lockup expirations and its determinants: Malaysian evidence
title_full	Impact of IPO lockup expirations and its determinants: Malaysian evidence
title_fullStr	Impact of IPO lockup expirations and its determinants: Malaysian evidence
title_full_unstemmed	Impact of IPO lockup expirations and its determinants: Malaysian evidence
title_sort	impact of ipo lockup expirations and its determinants: malaysian evidence
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2016
url	https://etd.uum.edu.my/6360/1/s90586_01.pdf https://etd.uum.edu.my/6360/2/s90586_02.pdf
_version_	1747828065706180608
spelling	my-uum-etd.63602021-04-19T07:13:52Z Impact of IPO lockup expirations and its determinants: Malaysian evidence 2016 Shamsul Bahrain, Mohamed Arshad Taufil Mohd, Kamarun Nisham Ahmad Zaluki, Nurwati Ashikkin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance This dissertation examines the impact of lockup expiration and its determinants in Malaysia using 292 IPOs during the period 2003-2012. Impact of lockup on abnormal returns, impact of lockup on abnormal trading volume, impact of regulatory changes on abnormal returns, and determinants of share price behavior as a proxy of abnormal returns at lockup expiration are the four study objectives. The research hypotheses are tested using event study method and multiple regressions. Results show the existence of significant negative abnormal returns surrounding the date of lockup expirations, hence contradicting evidence of the efficient market hypothesis. Further, this study also finds the existence of abnormal trading volumes. Both of these results are in line with those of the US studies. Meanwhile, there are two lockup regimes involved in this study arising from regulatory change that takes effect on 1 May 2003 and 3 August 2009, referred to as Regime #I and Regime #2, respectively. However, the results show that the change in lockup regulation does not have an impact on the abnormal returns at lockup expiration. Furthermore, the variables identified in the regression analysis are lockup regime, fractions of insiders buying and selling before and after expiration, company size and age, offer price, underwriter, auditor, and technology company. Results show that company size, fraction of insider selling and buying after lockup expiration are the significant factors in relations to abnormal returns which is driven by Regime #l. Implications of the study to SC are improving the present regulation by imposing the minimum requirement and allowing for longer lockup period to be determined between underwriter and IPO issuer, to Bursa Malaysia in posting the upcoming lockup expiration dates on their website to alert investors, and to research houses by starting coverage on earnings forecast and providing recommendations surrounding lockup expiration. 2016 Thesis https://etd.uum.edu.my/6360/ https://etd.uum.edu.my/6360/1/s90586_01.pdf text eng public https://etd.uum.edu.my/6360/2/s90586_02.pdf text eng public other doctoral Universiti Utara Malaysia Agganval, R. K., Krigman, L., & Womack, K. L. (2002). Strategic IPO underpricing, information momentum, and lockup expiration selling. Journal of Financial Economics, 66, 105-137. Ahmad-Zaluki, N., Campbell, K., & Goodacre, A. (2007). The long run share price performance of Malaysian initial public offerings (IPOs). 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Impact of IPO lockup expirations and its determinants: Malaysian evidence

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