Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs

In Malaysia, new issues are reported to be highly underpriced which subsequently led to oversubscription. Since underpricing in the Malaysia capital market has been unique with the regulatory effect (Ariff et.al.), this study extend regulatory intervention effect, namely the New Economic Policy (...

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Main Author:	Foo, Yuen Ling
Format:	Thesis
Language:	English English
Published:	1999
Subjects:	Economic policy Disclosure of information
Online Access:	http://psasir.upm.edu.my/id/eprint/7936/1/GSM_1999_42_A.pdf
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spelling	my-upm-ir.79362012-12-13T08:43:21Z Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs 1999 Foo, Yuen Ling In Malaysia, new issues are reported to be highly underpriced which subsequently led to oversubscription. Since underpricing in the Malaysia capital market has been unique with the regulatory effect (Ariff et.al.), this study extend regulatory intervention effect, namely the New Economic Policy (NEP) in the period of 1970- 1990 and Disclosure-Based System from 18t January 1996 on Malaysian IPOs. Comparison on pre- and post- policy implementation results show that the average market-adjusted return on both short run and long run period are higher in the postpolicy period. In the short run, the results of average market-adjusted returns in preversus the post- NEP are 52.35 versus 112.01 on first day (t=3.25), 57.63 versus 105.78 on first week (t=2.61), 62.89 versus 106.09 on first month (t=2.24), 46.41 versus 105.06 (t=2.89) on third month and 37.28 versus 106.71(t=3.55) on the sixth month. In the long run, the average market-adjusted returns of pre-versus the postNEP are 21.19 versus 108.89 (t=9.24) on the first year, -4.79 versus 97.18 (t=6.57) on second year and 6.94 versus 73.41 (t=5.74) on the third year. Implementation of disclosure-based system has significantly reduced the underpricing. The results of average market-adjusted returns of pre-and postimplementation of the system are 139.65 versus 1.39 on first day (t=I1.60), 140.26 versus 1.34 (t=1O.56) on first week, 136.08 versus 1.33 (t=1O.08) on first month and 147.93 versus 1.69 (t=10.09) on sixth month. Therefore, the study concluded that regulations do have effect on Malaysian IPOs. Economic policy Disclosure of information 1999 Thesis http://psasir.upm.edu.my/id/eprint/7936/ http://psasir.upm.edu.my/id/eprint/7936/1/GSM_1999_42_A.pdf application/pdf en public masters Universiti Putra Malaysia Economic policy Disclosure of information Graduate School of Management English
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English English
topic	Economic policy Disclosure of information
spellingShingle	Economic policy Disclosure of information Foo, Yuen Ling Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
description	In Malaysia, new issues are reported to be highly underpriced which subsequently led to oversubscription. Since underpricing in the Malaysia capital market has been unique with the regulatory effect (Ariff et.al.), this study extend regulatory intervention effect, namely the New Economic Policy (NEP) in the period of 1970- 1990 and Disclosure-Based System from 18t January 1996 on Malaysian IPOs. Comparison on pre- and post- policy implementation results show that the average market-adjusted return on both short run and long run period are higher in the postpolicy period. In the short run, the results of average market-adjusted returns in preversus the post- NEP are 52.35 versus 112.01 on first day (t=3.25), 57.63 versus 105.78 on first week (t=2.61), 62.89 versus 106.09 on first month (t=2.24), 46.41 versus 105.06 (t=2.89) on third month and 37.28 versus 106.71(t=3.55) on the sixth month. In the long run, the average market-adjusted returns of pre-versus the postNEP are 21.19 versus 108.89 (t=9.24) on the first year, -4.79 versus 97.18 (t=6.57) on second year and 6.94 versus 73.41 (t=5.74) on the third year. Implementation of disclosure-based system has significantly reduced the underpricing. The results of average market-adjusted returns of pre-and postimplementation of the system are 139.65 versus 1.39 on first day (t=I1.60), 140.26 versus 1.34 (t=1O.56) on first week, 136.08 versus 1.33 (t=1O.08) on first month and 147.93 versus 1.69 (t=10.09) on sixth month. Therefore, the study concluded that regulations do have effect on Malaysian IPOs.
format	Thesis
qualification_level	Master's degree
author	Foo, Yuen Ling
author_facet	Foo, Yuen Ling
author_sort	Foo, Yuen Ling
title	Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_short	Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_full	Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_fullStr	Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_full_unstemmed	Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs
title_sort	empirical study on regulatory effect of national economic policy and disclosure-based system on malaysian ipos
granting_institution	Universiti Putra Malaysia
granting_department	Graduate School of Management
publishDate	1999
url	http://psasir.upm.edu.my/id/eprint/7936/1/GSM_1999_42_A.pdf
_version_	1747810722971123712

Empirical Study on Regulatory Effect of National Economic Policy and Disclosure-Based System on Malaysian IPOs

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