IPOs in New Zealand: Nonfinancial disclosures, valuation, and short-term performance

Huong Dieu Dang

Global Finance Journal, 2023, vol. 56, issue C

Abstract: This study examines the effects of offer characteristics and prospectus disclosures of nonfinancial information on the valuation at the offer and the short-term performance of NZX-listed IPOs over the period 1991–2017. Compared with sector/industry–matched peers, the median IPO is overvalued by 39% at the offer, and more overvalued IPOs do not achieve higher cumulative abnormal returns (CARs) within the first year post-listing. IPOs purchased at the offer yield first-day average abnormal return of 3.4%–3.8% and one-year average CARs of 3.54%–6.21%. Determinants of valuation and short-term performance include the time gap between prospectus registration and offer open, float rate, investment bank reputation, and prospectus disclosures of an employee share ownership plan or a people-focused culture.

Keywords: Initial public offering; Benchmark-adjusted performance; Valuation; Price multiples; Prospectus disclosure; Environmental, Social and Governance information (search for similar items in EconPapers)
JEL-codes: G12 G32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:56:y:2023:i:c:s1044028322000394

DOI: 10.1016/j.gfj.2022.100737

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