ARE IPOS UNDERPRICED? EMPIRICAL EVIDENCE FROM SAUDI ARABIA
Underpricing of initial public offerings (IPOs) is a common phenomenon that widely studied over many periods and a broad range of countries. This paper examines the extent of underpricing of IPOs in Saudi Arabia by using the data of 44 IPOs listed on the Saudi Stock Exchange from January 2010 till October 2021. We found that IPOs on average were underpriced by 49.4%. The stepwise multiple regression results showed that the number of individual subscribers, the level of over-subscription by individuals, and the firm size have a significant relationship with IPO returns. The outcomes are hence consistent with the prediction of ex-ante uncertainty and the winners’ curse hypothesis.
Keywords: Initial Public Offerings (IPOs), Underpricing, Offer Risk, Investor Sentiment, Listing Fee, Market Volatility
Abstract
This study examines how Environmental, Social, and Governance (ESG) performance affects financial outcomes for listed
Saudi Arabian companies between 2019 and 2023. Through a study…
ABSTRACT
The expansion of the Saudi economy depends on the financial markets. This study examines the
relationship between corporate governance and the performance of financial institutions…
Abstract
This paper develops a comprehensive macro stress-testing (MST) framework to evaluate the
resilience of Saudi Arabia’s financial sector against systemic risk over the period 2010–…