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An Analysis of Factors Affecting Investor Demand for Initial Public Offerings in Singapore

Author

Listed:
  • Li Li Eng

    (The National University of Singapore, Singapore)

  • Hwee Shan Aw

    (The National University of Singapore, Singapore)

Abstract

This article investigates the impact of fundamentals of initial public offering (IPO) firms on two categories of investors, large and small investors. In the decision to purchase IPOs, the demand by large investors is positively associated with earnings yield, firm size and underpricing, and negatively associated with book-to-market ratio. Large investor demand is higher for issues denominated in the local currency (Singapore dollars) than issues denominated in foreign currencies. In contrast, the demand by small investors is negatively associated with earnings yield, firm size and underpricing. Small investor demand is also lower for issues denominated in Singapore dollars than issues denominated in foreign currencies.

Suggested Citation

  • Li Li Eng & Hwee Shan Aw, 2000. "An Analysis of Factors Affecting Investor Demand for Initial Public Offerings in Singapore," Multinational Finance Journal, Multinational Finance Journal, vol. 4(1-2), pages 133-153, March-Jun.
    • Handle: RePEc:mfj:journl:v:4:y:2000:i:1-2:p:133-153
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    References listed on IDEAS

    as
    1. Baron, David P, 1982. "A Model of the Demand for Investment Banking Advising and Distribution Services for New Issues," Journal of Finance, American Finance Association, vol. 37(4), pages 955-976, September.
    2. Ball, R & Brown, P, 1968. "Empirical Evaluation Of Accounting Income Numbers," Journal of Accounting Research, Wiley Blackwell, vol. 6(2), pages 159-178.
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    Cited by:

    1. Yong, Othman, 2007. "A review of IPO research in Asia: What's next?," Pacific-Basin Finance Journal, Elsevier, vol. 15(3), pages 253-275, June.

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    More about this item

    Keywords

    initial public offerings; fundamentals; small investors; large investors;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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