Flipping activity in the Pakistan IPO market

Flipping is acknowledged as one of the anomalies surrounding Initial Public Offering (IPO) activities. Despite its recognition, little attention has been given to examining whether it exists in the Pakistani IPO market. Further, factors that can explain this phenomenon remain unexplored in the Pakis...

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Main Author:	Anwar, Ayesha
Format:	Thesis
Language:	eng eng eng
Published:	2021
Subjects:	HF5001-6182 Business HG Finance
Online Access:	https://etd.uum.edu.my/10333/1/permission%20to%20deposit-not%20allow-903049.pdf https://etd.uum.edu.my/10333/2/s903049_01.pdf https://etd.uum.edu.my/10333/3/s903049_02.pdf
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id	my-uum-etd.10333
record_format	uketd_dc
spelling	my-uum-etd.103332023-03-01T04:18:38Z Flipping activity in the Pakistan IPO market 2021 Anwar, Ayesha Mohd Rashid, Rasidah School of Economics, Finance & Banking School of Economics, Finance and Banking HF5001-6182 Business HG Finance Flipping is acknowledged as one of the anomalies surrounding Initial Public Offering (IPO) activities. Despite its recognition, little attention has been given to examining whether it exists in the Pakistani IPO market. Further, factors that can explain this phenomenon remain unexplored in the Pakistani IPO market. Therefore, this study investigated whether flipping exists and its determinants, including state-owned IPO, sponsor ownership, pricing mechanism, political government regime, lock-up period, and lock-up ratio. The focus on such variables was motivated by the unique features, institutional settings, and regulatory frameworks of the Pakistani market that may influence the IPO flipping activity. The determinants were considered using demand and supply, signalling theory, and loss aversion bias. A sample of 95 IPOs listed on the Pakistan Stock Exchange from 2000 to 2019 was used. The results of the t-test depict that the Pakistan IPO market experience high flipping activity on the first day of listing. The ordinary least squares and quantile regression results show that state- owned IPOs and voluntary lock-up ratios have positive impacts on the flipping of IPO shares. In contrast, the book-building pricing mechanism has a negative impact. Furthermore, lock-up periods for the entire business life and five years, as well as the lock-up ratio, have a negative impact on IPO flipping activities because the act of pre- IPO shareholders retaining the shares for long periods signals quality to investors. In addition, investors’ demand moderates the positive link between state-owned IPO and flipping activity. Overall the findings of this study provide evidence of the existence of flipping activities, and its predictors in Pakistan. Moreover, the outcome has significant implications for issuers and regulators in terms of recognising the continuation of the current lock-up provision and book building price mechanism to reduce flipping activity. 2021 Thesis https://etd.uum.edu.my/10333/ https://etd.uum.edu.my/10333/1/permission%20to%20deposit-not%20allow-903049.pdf text eng staffonly https://etd.uum.edu.my/10333/2/s903049_01.pdf text eng 2024-12-29 staffonly https://etd.uum.edu.my/10333/3/s903049_02.pdf text eng staffonly other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng
advisor	Mohd Rashid, Rasidah
topic	HF5001-6182 Business HG Finance
spellingShingle	HF5001-6182 Business HG Finance Anwar, Ayesha Flipping activity in the Pakistan IPO market
description	Flipping is acknowledged as one of the anomalies surrounding Initial Public Offering (IPO) activities. Despite its recognition, little attention has been given to examining whether it exists in the Pakistani IPO market. Further, factors that can explain this phenomenon remain unexplored in the Pakistani IPO market. Therefore, this study investigated whether flipping exists and its determinants, including state-owned IPO, sponsor ownership, pricing mechanism, political government regime, lock-up period, and lock-up ratio. The focus on such variables was motivated by the unique features, institutional settings, and regulatory frameworks of the Pakistani market that may influence the IPO flipping activity. The determinants were considered using demand and supply, signalling theory, and loss aversion bias. A sample of 95 IPOs listed on the Pakistan Stock Exchange from 2000 to 2019 was used. The results of the t-test depict that the Pakistan IPO market experience high flipping activity on the first day of listing. The ordinary least squares and quantile regression results show that state- owned IPOs and voluntary lock-up ratios have positive impacts on the flipping of IPO shares. In contrast, the book-building pricing mechanism has a negative impact. Furthermore, lock-up periods for the entire business life and five years, as well as the lock-up ratio, have a negative impact on IPO flipping activities because the act of pre- IPO shareholders retaining the shares for long periods signals quality to investors. In addition, investors’ demand moderates the positive link between state-owned IPO and flipping activity. Overall the findings of this study provide evidence of the existence of flipping activities, and its predictors in Pakistan. Moreover, the outcome has significant implications for issuers and regulators in terms of recognising the continuation of the current lock-up provision and book building price mechanism to reduce flipping activity.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Anwar, Ayesha
author_facet	Anwar, Ayesha
author_sort	Anwar, Ayesha
title	Flipping activity in the Pakistan IPO market
title_short	Flipping activity in the Pakistan IPO market
title_full	Flipping activity in the Pakistan IPO market
title_fullStr	Flipping activity in the Pakistan IPO market
title_full_unstemmed	Flipping activity in the Pakistan IPO market
title_sort	flipping activity in the pakistan ipo market
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2021
url	https://etd.uum.edu.my/10333/1/permission%20to%20deposit-not%20allow-903049.pdf https://etd.uum.edu.my/10333/2/s903049_01.pdf https://etd.uum.edu.my/10333/3/s903049_02.pdf
_version_	1776103793356701696

Flipping activity in the Pakistan IPO market

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