عرضه خصوصی، قیمت سهام، حجم و بحران مالی: مطالعه بازارهای نوظهور

Firms are increasingly resorting to private placements in recent years, yet there is no published study of emerging markets. There is a unique opportunity to study this behavior during a severe financial crisis, when firms resorted to private placements to recover financially distressed firms. Our analysis using data over fifteen years shows (a) a significant 2–3% positive share price reaction, affirming asymmetric information effect, (b) a significant volume activity, and (c) the price impact is different across a period of a major financial crisis. If the proceeds from placement are earmarked for investment, share price is negatively (positively) correlated during the crisis (non-crisis) periods. Our finding on regulation is inconsistent with prior reports in developed markets: this is explained by the stricter restrictions on trading of private issues in emerging market. These results provide modest new contributions to the literature on private placements.

Research on private placement disclosure effect on share returns has established a positive relationship in several developed markets. It is suggested that private placements – as opposed to rights issues – reduce agency costs-cum-information asymmetry thus leading to a positive share price reaction to such events: ( Wruck, 1989). Hertzel and Smith (1993) assert that private placement signals issuing firm's undervaluation, which help to mitigate information asymmetry. Hence the observed positive price effect has become entrenched in studies using data from developed markets. Should share price behavior to private placements in emerging markets be identical to that in developed markets? Prior studies show that in most emerging markets, a positive price effect to rights issues has been observed, which is contrary to the well-known negative effect explained as due to an overvaluation of shares associated with rights issues. 1 Next, should unique regulation in emerging markets on share trading by private equity providers distort share return behavior? Should share returns behave the same way during a severe financial crisis period, when private equity providers acted more as white knights to troubled firms, hence helping to reduce the cost of financial distress of firms? Emerging markets selected for this study already had high share ownership concentration, so should Wruck's hypothesis be tested in such a concentrated share market? Individual Malaysian investors, who provided private placement funds, also increased an already high ownership concentration. These are issues that could be addressed by examining private placements in the emerging market of Malaysia. In short, should private placement effect be the same as in the developed markets; are there new research issues pertinent to emerging markets? There is a specific rule in Malaysia that requires that parties buying private placements cannot trade their shares for up to three years from the date of purchase. This unique rule is likely to increase the behavior predicted by Wruck (1989) on information asymmetry given ownership concentration increases. During the Asian Financial Crisis of 1997/8, private placements were used as a means to rescue firms with financial distress: should share price effect be opposite to the effect in normal market condition? The rest of the paper is organized as follows: Section 2 reviews selected relevant literature. The data set, test models, and hypotheses are explained in Section 3 while in Section 4 the reader is presented the findings. Section 5 concludes the paper. The findings reported in this paper extend our understanding of the price behavior of emerging markets by providing new results on some unanswered questions.

We believe that this paper reports a modest number of new findings on emerging market behavior to private placement disclosures and how the CARs to the event are correlated with a number of firm-specific variables. The important contribution of this attempt is the answer to multi-faceted research questions beyond simply answering the stock price reaction. Given some unique set of research questions on regulatory differences, effect of crisis and intended use of funds data, this research is able to provide a fresh outlook on some unresearched issues. The methodology we applied is standard, and we show how a matched sample could address the key question of whether non-private-placement firms are different from the ones announcing private placement. It is found that, given the higher financial distress of such firms in this market, the yields of the private placement firms are a lot lower than the ones not using private placement. There is a signaling impact in this market for non-users of private placements. Table 11 provides a quick summary of the contributions of this paper to the emerging market literature. Table 11. Findings on an emerging market on private placements, 1992–2008. Research questions Expected results Findings 1 Private placers different? Yes, white knights choose to secure profits Positive, Reduced signaling and monitoring costs 2 Private placement effect? Stock prices and volume? Yes, based on prior studies Positive on share prices Positive on volume traded 3 Concentration increased? Yes, (no studies yet) Positive, concentration increasedsignificantly 4 Do crises magnify effect? Yes, crisis increase risk (no studies yet) Positive, price effect 3 × larger against normal 5 Does intended use matter? Yes, loan repayments but not for increasing funds Confirmed as predicted 6 Are discounts favored? Yes, to assure confidence in fund providers Positive discount effect 7 Correlation of CARs with firm-specific variables Yes, (seldom studied data needs are intensive) Some confirmed variables having effect, others no. Table options Beyond establishing a positive price reaction to private placements as a risk-reducing fund-raising through this method, there are some unique findings from this study need to be highlighted. Significant findings on the regulatory impact show that emerging market behavior could well be different for the reasons that are due to unique characteristics of emerging market private placement. A confirmation of a three-fold increase in price effect during financial crisis suggests this is a worthy research question to be addressed in all markets following the Global Financial Crisis of 2007/8. Our findings on how the intended use of funds affect the CAR values as well as how discounts offered increase CAR values are new to this topic. Finally, we showed two fresh perspectives on this topic. First, we showed that there is a significant difference between the private-placement firms and those that did not resort to private placements. It appears that the non-users are better quality firms. Second, this paper identified a number of firm-specific factors correlated with the abnormal returns. Extensive testing of more emerging markets using our research design may in future add further new findings to the equity raising behavior of firms listed and traded in some 75 emerging markets around the world.