Rationale behind IPO underpricing: evidence from Asian REIT IPOs

Ooi, J. T.L., Mori, M. and Wong, W.-C. (2019) Rationale behind IPO underpricing: evidence from Asian REIT IPOs. Real Estate Economics, 47 (1). pp. 104-137. ISSN 1080-8620 doi: 10.1111/1540-6229.12243

Abstract/Summary

This article examines the rationale behind IPO underpricing using a sample of REIT IPOs in Asia. Although the IPOs registered an average initial return of 3.08%, the issuers were able to sell the IPO shares above their fundamental values by timing the listings in periods when existing REIT stocks are traded at a premium to their net asset values (NAV). An IPO could therefore be underpriced and yet produce a net gain for the issuer. The issuers’ net gain from IPO is, however, negatively related to long‐run performance of REIT IPOs.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/79269
Identification Number/DOI	10.1111/1540-6229.12243
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Wiley
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