An examination factors influencing under-pricing of IPO on the Vietnamese market from 2014 to march 2019
Abstract
Many previous researches indicated the existence of short-term underpricing of Initial Public Offering (IPO) in Vietnamese stock market over 14 years from beginning establishing, and their explanations were through various determinants and theories. To continue, this thesis is conducted in order to investigate evidence of this phenomenon continuously existed or not from 2014 to March 2019. In addition, seven potential factors including Issued size; Firm Age; Firm Size; Oversubscription; Financial leverage ; Initial price; ROA ratio were examined to find correlation to the degree of IPO underpricing. Accordingly, we compare the first listing price and the average winning price at auction event of 74 IPOs that listed in HOSE, HNX and UPCoM as the return of stocks (MAIR) reflecting the level of underpricing. As the results, I found evidence of IPO underpring at 18.9% with p-value of 0.002. Specifically, after running OLS regression, the result shows that the excess volume of ordered and offered stocks in auction have a negatively significant relationship to MAIR, along with ROA ratio also obtains significant effect in positive direction. Otherwise, the rest of 5 variables do not correlate with the underpricng degree of IPOs in Vietnam.