The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
This paper examines the effect of IPO lockup expiration on share prices surrounding the event date involving two lockup regimes. The sample consists of 292 IPOs listed on Bursa Malaysia between May 1,2003 and December 31,2012. Lockup in Malaysia is mandatory where it is regulated by the Securities C...
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| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
2016
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| Subjects: | |
| Online Access: | http://repo.uum.edu.my/24252/1/4TH%20ICGSE%202016%20102-108.pdf http://repo.uum.edu.my/24252/ |
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| Summary: | This paper examines the effect of IPO lockup expiration on share prices surrounding the event date involving two lockup regimes. The sample consists of 292 IPOs listed on Bursa Malaysia between May 1,2003 and December 31,2012. Lockup in Malaysia is mandatory where it is regulated by the Securities Commissions compared to voluntary lockup where it is negotiated between IPO firms and their underwriters. Using the market model event study method, the result shows a significant negative abnormal return at the expiration of the lockup period. Thus, the study provides evidence that contradicts the semi-strong form of the Efficient Market Hypothesis (EMH). According to EMH, the expiration of the lockup period which is piblic knowledge should not be accompanied with a significant abnormal return. In addition, the evidence also shows that the change in lockup regulation does not have an impact in reducing the negative abnormal returns at the expiration of the first stage lockup period. |
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