The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS

This paper examines the effect of IPO lockup expiration on share prices surrounding the event date involving two lockup regimes. The sample consists of 292 IPOs listed on Bursa Malaysia between May 1,2003 and December 31,2012. Lockup in Malaysia is mandatory where it is regulated by the Securities C...

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Main Authors: Mohamed Arshad, Shamsul Bahrain, Taufil Mohd, Kamarun Nisham, Ahmad Zaluki, Nurwati Ashikkin
Format: Conference or Workshop Item
Language:English
Published: 2016
Subjects:
Online Access:https://repo.uum.edu.my/id/eprint/24252/1/4TH%20ICGSE%202016%20102-108.pdf
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author Mohamed Arshad, Shamsul Bahrain
Taufil Mohd, Kamarun Nisham
Ahmad Zaluki, Nurwati Ashikkin
author_facet Mohamed Arshad, Shamsul Bahrain
Taufil Mohd, Kamarun Nisham
Ahmad Zaluki, Nurwati Ashikkin
author_sort Mohamed Arshad, Shamsul Bahrain
collection UUM
description This paper examines the effect of IPO lockup expiration on share prices surrounding the event date involving two lockup regimes. The sample consists of 292 IPOs listed on Bursa Malaysia between May 1,2003 and December 31,2012. Lockup in Malaysia is mandatory where it is regulated by the Securities Commissions compared to voluntary lockup where it is negotiated between IPO firms and their underwriters. Using the market model event study method, the result shows a significant negative abnormal return at the expiration of the lockup period. Thus, the study provides evidence that contradicts the semi-strong form of the Efficient Market Hypothesis (EMH). According to EMH, the expiration of the lockup period which is piblic knowledge should not be accompanied with a significant abnormal return. In addition, the evidence also shows that the change in lockup regulation does not have an impact in reducing the negative abnormal returns at the expiration of the first stage lockup period.
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spelling uum-242522020-11-04T03:01:59Z https://repo.uum.edu.my/id/eprint/24252/ The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS Mohamed Arshad, Shamsul Bahrain Taufil Mohd, Kamarun Nisham Ahmad Zaluki, Nurwati Ashikkin HB Economic Theory This paper examines the effect of IPO lockup expiration on share prices surrounding the event date involving two lockup regimes. The sample consists of 292 IPOs listed on Bursa Malaysia between May 1,2003 and December 31,2012. Lockup in Malaysia is mandatory where it is regulated by the Securities Commissions compared to voluntary lockup where it is negotiated between IPO firms and their underwriters. Using the market model event study method, the result shows a significant negative abnormal return at the expiration of the lockup period. Thus, the study provides evidence that contradicts the semi-strong form of the Efficient Market Hypothesis (EMH). According to EMH, the expiration of the lockup period which is piblic knowledge should not be accompanied with a significant abnormal return. In addition, the evidence also shows that the change in lockup regulation does not have an impact in reducing the negative abnormal returns at the expiration of the first stage lockup period. 2016 Conference or Workshop Item PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/24252/1/4TH%20ICGSE%202016%20102-108.pdf Mohamed Arshad, Shamsul Bahrain and Taufil Mohd, Kamarun Nisham and Ahmad Zaluki, Nurwati Ashikkin (2016) The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS. In: 4th International Conference on Global Social Entrepreneurship (PENANG), 2016, Penang.
spellingShingle HB Economic Theory
Mohamed Arshad, Shamsul Bahrain
Taufil Mohd, Kamarun Nisham
Ahmad Zaluki, Nurwati Ashikkin
The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
title The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
title_full The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
title_fullStr The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
title_full_unstemmed The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
title_short The Effect of Share Price and Regulatory Change at Lockup Expiration in Malaysian IPOS
title_sort effect of share price and regulatory change at lockup expiration in malaysian ipos
topic HB Economic Theory
url https://repo.uum.edu.my/id/eprint/24252/1/4TH%20ICGSE%202016%20102-108.pdf
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