توضیح زیر قیمت IPOs در بازارهای مرزی: شواهدی از بورس اوراق بهادار نیجریه

The paper provides empirical analyses of IPO underpricing on the Nigerian Stock Exchange, from the period 1990 to 2006. The results indicate an average abnormal initial day returns of 43.1%. There is evidence of long-run underperformance of 0.6%. Results from our regression model explaining initial abnormal returns for the IPOs of Nigeria show that size of firm and audit quality are important variables affecting underpricing. The results also show the presence of a non-linear relationship between the offer price and underpricing.

Initial public offerings (IPOs) are a means of going public for firms. IPOs offer opportunities for firms to diversify ownership, use stock markets as an exit strategy for mature businesses and raise funds for investment. In the case of younger firms, IPOs also serve as an early-stage financing option, Riding (1998). One of the interesting anomalies in finance is the fact that IPOs provide significant abnormal returns on the initial day of trading – Khurshed and Mudambi (2002). The abnormal returns from IPOs are as a result of underpricing of IPOs, which occurs when the offer price of an IPO is significantly lower than the end of first day trading price as well as trading prices for subsequent days. It is also argued that even though initial returns are high and positive, in the long run IPOs yield significantly negative abnormal returns (Ritter, 1991 and Levis, 1993).

Our study examined the empirics of underpricing on the Nigerian Stock Exchange a frontier African stock market. The results show that in line with other studies, underpricing is larger on the initial day after the IPO issue and declines gradually as seen in the CAR for subsequent periods. In line with theoretical and empirical postulations, there is evidence of long-run underperformance for the IPOs in Nigeria. Results from an empirical model to explain determinants of underpricing show that, consistent with theory and empirical studies a higher offer price sends signals of low uncertainty. Hence, there is a negative relationship between the offer price and underpricing of IPOs. There is also the presence of ex ante uncertainty in IPO pricing in the Nigerian market as measured by daily returns volatility. Issuers in anticipation of greater ex ante uncertainty surrounding the firm, offer lower prices for the issue and thus, increase the level of IPO underpricing. Finally, our results reveal that it is important that local auditing improve their auditing and local standards for auditing firms. This helps to reduce the uncertainties surrounding the firm and consequently reduces the underpricing factor.