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Privatisation in New Zealand and Australia: an empirical analysis

Jarrod Kerr and Lawrence Rose

Managerial Finance, 2007, vol. 34, issue 1, 41-52

Abstract: Purpose - The paper aims to investigate the long-run performance of privatised initial public offerings (IPOs) and their effects on the New Zealand share market (NZSE) and the Australian share market (ASX). Design/methodology/approach - The paper examines the relationship between privatisation and share market capitalisation, liquidity and share ownership. The research also evaluates long-run risk-return performance of the privatised companies' portfolios. Findings - The analysis reveals that privatisations have significantly increased share market capitalisation and have impacted on the market liquidity. In general, anyone investing in privatised companies' portfolios could have received significantly higher returns than investing in an aggregate market portfolio. Originality/value - The findings have significant practical implications for individual and institutional investors.

Keywords: Privatization; Shares; New Zealand; Australia; Financial performance (search for similar items in EconPapers)
Date: 2007
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