The effect of ownership structure on the IPOs underpricing, evidence from the Moroccan initial price offerings

Dissertant

Hassani, Umar Muhammad Qadiri

Thesis advisor

Koubida, Salim

University

Al Akhawayn University

Faculty

The School of Business Administration

University Country

Morocco

Degree

Master

Degree Date

2008

English Abstract

IPO undepricing is a widely discussed phenomenon in the corporate finance field, either for developed and emerging markets.

When a company issue stocks for the first time to public investors, the issuance price tend to be lower than the real stock price (based on different valuation methods).

This results in a substantial price jump in the first day of trading.

What are the reasons behind this underpricing? The asymmetric information models and signaling theories are the most used explanation for this phenomenon.

This research will examine empirically the performance of Moroccan’s IPOs in order to identify the relationship between IPOs underpricing and the companies’ ownership structure.

The correlation between the two studied variables, known as the ownership structure and the IPO underpricing, will be tested using a non-parametric measure of correlation.

In this study, a model will be developed.

This model will test some of information asymmetry proxies applied to the Moroccan context.

Broadly speaking, the empirical results show an average market adjusted underpricing of 21.96% over the 25 new listing in the Casablanca Stock Exchange between 2004 and 2007.

Moreover, the study reveals a negative relationship between the ownership concentration (measured by the outstanding shares held by the top shareholder) and the degree of underpricing for Moroccan IPO.

Main Subjects

Financial and Accounting Sciences

Topics

• Securities
• Prices
• Stocks
• Morocco

No. of Pages

54

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-628408