A comparative analysis of IPO performance for firms in China’s Mainland and Hong Kong SAR

Tsz Wan Cheng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

This study provides a comprehensive analysis on the characteristics of Initial Public Offerings (IPOs)and listing day stock return performance of Mainland Chinese (Mainland)firms and Hong Kong SAR(HK) firms, both listed on the Stock Exchange of Hong Kong (SEHK)from 1993 to 1997 .The results indicate some significant differences in IPO returns and performance forecasts between Mainland and HK firms. However, the over-subscription ratios, the allotment ratios between small and large investors, and the intra-day price patterns on the listing day for both Mainland and HK firms are similar. These findings indicate that the HK firms are more under-priced than the Mainland firms. In addition , Mainland firms report a more optimistic earnings and dividend yield estimates than the HK firms .Finally , small investors receive similar percentages of shares from IPO underwriters for both Mainland and HK issues.
Original languageEnglish
Pages (from-to)52-58
Number of pages7
JournalChina & world economy
Volume9
Issue number4
Publication statusPublished - 2001

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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