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Abnormal Returns in Privatization Public Offerings: The case of Portuguese firms

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Listed:
  • Carla Vieira

    (Faculty õf Economics, University of Oporto)

  • Ana Paula Serra

    (Faculty of Economics, University of Oporto)

Abstract

This paper provides evidence on abnormal returns of Portuguese privatization public offerings for the period from 1989 to 2001. This study explores the abnormal performance of a comprehensive sample of Portuguese privatization transactions and investigates the determinants of the observed price behavior. We find some evidence of the underpricing phenomenon for privatized offerings but initial returns are low and barely significant. The results show further that privatization IPOs underperform private sector IPOs. In the long run, we observe negative abnormal returns. While in early event months, privatization public offerings yield more negative returns than private sector offerings, this effect is reversed in longer horizon periods. Initial underpricing is thus partially reversed and investors seem to require higher returns in partial privatizations.

Suggested Citation

  • Carla Vieira & Ana Paula Serra, 2006. "Abnormal Returns in Privatization Public Offerings: The case of Portuguese firms," Notas Económicas, Faculty of Economics, University of Coimbra, issue 23, pages 6-34, June.
    • Handle: RePEc:gmf:journl:y:2006:i:23:p:6-34
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    References listed on IDEAS

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    Cited by:

    1. Leila Bateni & Farshid Asghari, 2014. "Study of Factors Affecting the Initial Public Offering (IPO) Price of the Shares on the Tehran Stock Exchange," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 68-73, September.
    2. Henna Malik & Malik Muhammad Shehr Yar & Attiya Yasmin Javid, 2017. "New Issues Puzzle: Experience from Karachi Stock Exchange," Working Papers id:12182, eSocialSciences.
    3. repec:kap:iaecre:v:13:y:2007:i:1:p:65-80 is not listed on IDEAS
    4. Attiya Yasmin Javid & Henna Malik, 2016. "Performance and capital structure of IPOs in Pakistan from 2000 to 2015," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-19, December.
    5. Haykel Hamdi & Duc Khuong Nguyen & Hassan Obeid, 2014. "The short- and long-term performance of privatization initial public offerings in Europe," Working Papers 2014-241, Department of Research, Ipag Business School.
    6. Maria Borges, 2007. "Underpricing of Initial Public Offerings: The Case of Portugal," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 13(1), pages 65-80, February.

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    More about this item

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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