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IPO's in Emerging Markets

IPO's in Emerging Markets

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An essay for the 2012 Undergraduate Awards Competition by Laura Byrne. Originally submitted for Bachelor of Business (Honors) at None, with lecturer Collette Kirwan in the category of Business & Economics
An essay for the 2012 Undergraduate Awards Competition by Laura Byrne. Originally submitted for Bachelor of Business (Honors) at None, with lecturer Collette Kirwan in the category of Business & Economics

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Published by: Undergraduate Awards on Aug 30, 2012
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10/27/2013

 
 
IPO’s in Emerging Markets
 
Word Count:
3934
 
 
Abstract
The paper examines Initial Public Offerings (IPOs) that took place in the advancedemerging market of Brazil and secondary emerging market of India, during the period2009 -2011. It takes into consideration the underpricing trend of recent offerings in thesemarkets. Whether these Initial Public Offeringss follow a trend in regards theirperformance relative to their markets. Investigating industries issuing in these marketsand which countries are investing in emerging markets. Research results indicate a rise inthe level of overpricing rather than underpricing in these markets thus a reduction infirms with money left on the table. Also that the emerging market IPO growth story isattracting investors from developed markets. Finally as these markets see emergingmarkets in particular are showing huge potential growth in the area of new issuings astheir economies expand and due to this are attracting investors from developed markets.
 
 
Table of Contents1.0 Introduction ................................................................................................................. 2
 1.1 Rationale for Study.................................................................................................... 11.2 Research Objectives .................................................................................................. 11.3 Outline of Paper ........................................................................................................ 2
2.0 Literature Review ....................................................................................................... 3
 2.1 Initial Public Offerings .............................................................................................. 32.2 Underwriter ............................................................................................................... 52.3 Underpricing.............................................................................................................. 52.4 Money Left on the Table ........................................................................................... 62.5 Information Asymmetry ............................................................................................ 72.5.1 Signalling Theory ............................................................................................... 82.5.2 Winners Curse .................................................................................................... 8
3.0 Data and Methodology ............................................................................................... 9
 3.1 Research Questions and Methods ............................................................................. 93.2 Research Data .......................................................................................................... 103.3 Limitations .............................................................................................................. 11
4.0 Findings ...................................................................................................................... 12
 4.1 Underpricing............................................................................................................ 124.2 Money Left on the Table ......................................................................................... 134.3 Abnormal Returns ................................................................................................... 154.4 Countries Investing in Emerging Market IPOs ....................................................... 164.5 Industries Issuing IPOs in Emerging Markets......................................................... 17
5.0 Discussion................................................................................................................... 18
 5.1 Underpricing............................................................................................................ 185.2 Money Left on the Table ......................................................................................... 195.3 Abnormal Returns ................................................................................................... 195.4 Countries Investing in Emerging Market IPOs ....................................................... 205.5 Industries Issuing IPOs in Emerging Markets......................................................... 20
6.0 Conclusion & Recommendations............................................................................. 22
 6.1 Conclusion ............................................................................................................... 226.2 Recommendations ................................................................................................... 22

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