Investor sentiment and IPO pricing during pre-market and aftermarket periods: Evidence from Hong Kong

Li Jiang, Gao Li

Research output: Journal article publicationJournal articleAcademic researchpeer-review

27 Citations (Scopus)


Using a sample of 293 IPOs in Hong Kong, we separately measure pre-market and aftermarket sentiments and examine their impact on IPO pricing in a two-stage framework. We find that underwriters only partially adjust offer price to reflect pre-market sentiment and money left on the table is positively related to the deterioration of investor sentiment in the aftermarket period. We also show that aftermarket sentiment causes a further price run-up in the secondary market. Overall, our findings suggest that institutional investors play an important role of re-distributing shares in the secondary market and underwriters take into consideration of investor sentiment in pricing IPOs during pre-market and aftermarket periods.
Original languageEnglish
Pages (from-to)65-82
Number of pages18
JournalPacific Basin Finance Journal
Publication statusPublished - 1 Jun 2013


  • Aftermarket trading
  • Institutional investors
  • Investor sentiment
  • IPO pricing

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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