The Long Run Share Price Performance of Malaysian Initial Public Offerings (IPOs)

doi:10.1111/j.1468-5957.2006.00655.x

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Wiley InterScience

Journal of Business Finance & Accounting

Volume 34 Issue 1-2, Pages 78 - 110

Published Online: 21 Feb 2006

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The Long Run Share Price Performance of Malaysian Initial Public Offerings (IPOs)

Nurwati A. Ahmad-Zaluki ¹ , Kevin Campbell ¹ Alan Goodacre ¹*

¹ The first author is Research Fellow at the University of Stirling and Lecturer at the Universiti Utara Malaysia; the second author is Senior Lecturer in Finance at the University of Stirling; and the third author is Professor of Accounting and Finance at the University of Stirling. The financial support of the Malaysian government (JPA) and the Universiti Utara Malaysia is gratefully acknowledged (for Nurwati A. Ahmad-Zaluki).

* Address for correspondence: Nurwati A. Ahmad-Zaluki, Department of Accounting and Finance, University of Stirling, Stirling FK9 4LA, Scotland, UK.
e-mail: naa3@stir.ac.uk or nurwati@uum.edu.my

The authors have greatly benefited from the comments of an anonymous referee, David Power and participants at the BAA Annual Conference at the University of York and the Scottish Regional Conference at the University of Paisley. They also thank Jay Ritter, Kate Howie and Roy Baker for their assistance. Any remaining errors are the authors' own responsibility.

KEYWORDS

Initial public offerings • long run performance • Fama-French model

ABSTRACT

Abstract: This paper investigates the long run share price performance of 454 Malaysian IPOs during the period 1990 to 2000. In contrast with developed markets, significant overperformance is found for equally-weighted event time CARs and buy-and-hold returns using two market benchmarks, though not for value-weighted returns or using a matched company benchmark. The significant abnormal performance also disappears under the calendar-time approach using the Fama-French (1993) three factor model. While the long run performance of Main and Second Board IPOs does not differ, the year of listing, issue proceeds and initial returns are found to be performance-related.

(Paper received November 2004, revised version accepted May 2006)

DIGITAL OBJECT IDENTIFIER (DOI)

10.1111/j.1468-5957.2006.00655.x About DOI