IPOs Underpricing in Morocco

Dissertant

Moumnani, Kaoutar Tagnaouti

Thesis advisor

Sawicki, Julia

University

Al Akhawayn University

Faculty

The School of Business Administration

University Country

Morocco

Degree

Master

Degree Date

2007

English Abstract

This paper proposes some explanations for underpricing in the Moroccan market.

By using factors that were used by other researchers, we demonstrate how the Moroccan market reacts to these factors.

We use market conditions (market return, and market volatility) and firm specific factors (market capitalization, industry, age, and fraction of equity sold).

From this study, we show that the magnitude of underpricing is significantly lower just 22.56% average initial return than other emerging markets.

In the long run, Moroccan IPOs show more underperformance (0.19% after two years) than in other emerging markets.

Moreover, market returns before the offer price is set affect the amount of IPO underpricing.

On the other hand, we do not find any significant effect of market volatility on the amount of underpricing even though it has a considerable effect on the variability of underpricing.

Concerning firm specific variables, market capitalization is the only variable that has a significant impact on underpricing.

We find a negative relationship between market capitalization and underpricing.

In the Moroccan market, there are two selling mechanisms (fixed price and hybrid auctions).

We show that hybrid auction is more efficient in controlling the effects of market conditions on underpricing than fixed price methods.

Main Subjects

Business Administration

No. of Pages

59

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-629441