An examination of the underpricing of H-Share IPOs in Hong Kong
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 559-582 |
| Journal / Publication | Review of Pacific Basin Financial Markets and Policies |
| Volume | 13 |
| Issue number | 4 |
| Publication status | Published - Dec 2010 |
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Abstract
The main purpose of this paper is to study the empirical determinants of the underpricing of H-share initial public offerings (IPOs) during the 1993-2003 period. A special characteristic of H-shares is that they are shares of companies incorporated in China, but are also listed abroad. Our estimates indicate that the average IPO underpricing level of H-shares was about 16.8%. We find that the conventional explanations for the worldwide IPO underpricing are not adequate in explaining the underpricing level of H-shares. Some new factors that are important in explaining the underpricing phenomenon in H-shares are identified. We show that the degree of IPO underpricing is positively associated with market conditions prior to issuance. It is also negatively related to the range of the issuing prices as well as to the growth rate of historical profits. In addition, it is found that firms cross-listed in Hong Kong and America have higher underpricing levels. © 2010 World Scientific Publishing Co. and Center for Pacific Basin Business, Economics and Finance Research.
Research Area(s)
- H-share, IPO, prospectus, Underpricing
Citation Format(s)
An examination of the underpricing of H-Share IPOs in Hong Kong. / Chong, Terence Tai-Leung; Yuan, Shuo; Yan, Isabel Kit-Ming.
In: Review of Pacific Basin Financial Markets and Policies, Vol. 13, No. 4, 12.2010, p. 559-582.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
