Performance of Demutualized, Cross-Listed and Newly Listed Ipos: Evidences from Alternative Investment Market (AIM)
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Performance of Demutualized, Cross-Listed and Newly Listed IPOs: Evidences from Alternative Investment Market (AIM) By Abdul Wahid Reg # S16C06P04001 Faculty of Management Sciences Riphah International University, Islamabad 2019 Performance of Demutualized, Cross-Listed and Newly Listed IPOs: Evidences from Alternative Investment Market (AIM) By Abdul Wahid Reg # S16C06P04001 Supervised By: Dr. Shahzad Ahmad Khan Co-Supervised By: Dr. Muhammad Zubair Mumtaz A thesis submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy In Management Sciences (Finance) at Riphah International University, Islamabad, Pakistan 2019 ii RIPHAH INTERNATIONAL UNIVERSITY, ISLAMABAD APPROVAL SHEET SUBMISSION OF HIGHER RESEARCH DEGREE THESIS The following statement is to be signed by the candidates ‘supervisor (s), Dean/ HOD and must be received by the COE, prior to the dispatch of the thesis to the approved examiners. Candidate’s Name & Reg #: Abdul Wahid & Reg # S16C06P04001 Programme Title: PhD (Finance) Faculty/Department: Management Sciences Thesis Title: Performance of Demutualized, Cross-Listed and Newly Listed IPOs: Evidences from Alternative Investment Market (AIM) I hereby certify that the above candidate’s work, including the thesis, has been completed to my satisfaction and that the thesis is in a format and of an editorial standard recognized by the faculty/department as appropriate for examination. The Thesis has been checked through Turnitin for plagiarism (test report attached). Signature (s): Supervisor: Dr. Shahzad Ahmad Khan Signature:__________________ Date:______________________ Co-supervisor: Dr. Muhammad Zubair Mumtaz Signature __________________ Date: _____________________ The undersigned certify that: 1. The candidate presented at a pre-completion seminar, an overview and synthesis of major findings of the thesis, and that the research is of a standard and extent appropriate for submission as a thesis. 2. I have checked the candidate’s thesis and its scope, format, and editorial standards are recognized by the faculty/department as appropriate. 3. The plagiarism check has been performed. Report is attached Signature (s): Dean Prof. Muhammad Amanullah Khan Signature _________________ Date: ________________ iii DECLARATION OF AUTHENTICATION I certify that the research work presented in this thesis is to the best of my knowledge my own. All sources used and any help received in the preparation of this dissertation have been acknowledged. I hereby declare that I have not submitted this material, either in whole or in part, for any other degree at this or any other institution. Signature………………. iv PLAGIARISM UNDERTAKING BY PHD SCHOLAR I solemnly that the research work presented in this thesis titled “Performance of Demutualized, Cross-Listed and Newly Listed IPOs: Evidences from Alternative Investment Market (AIM)” is solely my own research work with no significant contribution from any other person. Small contribution/help wherever taken has been duly acknowledged and complete thesis has been written by me. I understand the zero tolerance policy of the HEC and Riphah Internal University towards plagiarism. Therefore, I as an author of the above titled thesis declare that no portion of my thesis has been plagiarized and any material used as reference is properly referred/ cited. I undertake that if I am found guilty of any formal plagiarism in the above titled thesis even after award of PhD degree, university reserve the right to withdraw/revoke my PhD degree and HEC & University has the right to publish my name on HEC/university website on which names of students are placed who submitted plagiarized thesis. Student’s Signature _______________________ Name: Abdul Wahid v ACCEPTANCE CERTIFICATE Performance of Demutualized, Cross-Listed and Newly Listed IPOs: Evidences from Alternative Investment Market (AIM) By Abdul Wahid Reg # S16C06P04001 A thesis submitted in partial fulfillments of the requirements for the degree of Doctor of Philosophy In Management Sciences (Finance) We accept this thesis as conforming to the required standard Supervisor: Dr. Shahzad Ahmad Khan (Sig)_________________________ Co-Supervisor: Dr. Muhammad Zubair Mumtaz (Sig)________________________ External Examiner-1: Dr. Arshad Hassan (Sig)________________________ External Examiner-2: Dr. Saqib Gulzar (Sig)________________________ HOD/Incharge: Prof. Dr. Khurram Shahzad (Sig)_______________________ Dean: Prof. Muhammad Amanullah Khan (Sig)_______________________ vi DEDICATION This dissertation is lovingly dedicated to my mother, Ayesha BiBi. Her support, encouragement and constant love have sustained me throughout my life. vii ACKNOWLEDGEMENTS I thank to the Supremacy of Allah, Whose mercy abounds in the universe and no doubt only his omnipotence has bestowed on me the potential and ability to complete this research work. All reverence to His Holy Prophet Muhammad (P.B.U.H) and Al-e-Muhammad (P.B.U.H) for enlightening our conscience with the truest light of knowledge. I would like to extend my gratitude to my supervisor Dr. Shahzad Ahmad Khan, Faculty of Management sciences, Riphah International University and co-supervisor Dr. Muhammad Zubair Mumtaz from School of Social Sciences and Humanities (S3h), NUST, Islamabad. Their professional and technical skills helped me to implement different methodological techniques which were not previously used in the field of finance. They guided me through each and every step to understand the concepts with regard to their applicability in research. I also thank my Guidance Professor Dr. Khurram Shahzad, Associate Dean, Faculty of Management sciences, Riphah International University, Mr. Mubashir Hassan Zia, Senior Lecturer, Faculty of Management sciences, Riphah International University and Evaluation Committee which includes Professor Dr. Arshad Hassan Khan Dean FMS from CUST, Islamabad, and Dr. Saqib Gulzar from Comsat Wah Cant. These members provided their valuable inputs to improve my research. My special thanks to Professor Dr. Edmund H. Mantell who is professor of finance and economics at Pace University in New York, USA. He has enormous expertise in the field of Alternative Investment Market (AIM) and IPO research and his guidance over the last two years has enabled me to accomplish the task covering different dimensions of IPO research. I personally appreciate Dr. Edmund H. Mantell for providing his inputs at a short notice to improve my research. I also appreciate him as a co-author in other published papers. For econometric analysis, I thank Dr. Iftikhar Hussain Adil, for his time and support to understand Extreme Bounds Analysis (EBA) and other complicated econometric techniques. It is an immense pleasure to thank Dr. Jay Ritter, University of Florida who is a pioneer of research on long-term IPO performance and I am thankful for the support that he provided to improve the quality of my research. I would also like to thank my younger brother Muhammad Ahmed for assisting me to obtain data from different websites. All possible errors and omissions left in the dissertation are my sole responsibility. Abdul Wahid July 2019 viii Table of Content ABSTRACT ------------------------------------------------------------------------------------------------ 1 CHAPTER 1 ------------------------------------------------------------------------------------------------ 2 INTRODUCTION ----------------------------------------------------------------------------------------- 2 1.1 Introduction ----------------------------------------------------------------------------------- 3 1.2 Background ----------------------------------------------------------------------------------- 4 1.3 Problem Statement --------------------------------------------------------------------------- 6 1.4 Research Objectives ------------------------------------------------------------------------- 6 1.5 Research Questions -------------------------------------------------------------------------- 7 1.6 Rational of the Study ------------------------------------------------------------------------ 7 1.7 Purpose of the Study ------------------------------------------------------------------------- 8 1.8 Limitations of the study --------------------------------------------------------------------- 8 1.9 Importance and Scope of the Study -------------------------------------------------------- 9 CHAPTER 2 -----------------------------------------------------------------------------------------------11 LITERATURE REVIEW -------------------------------------------------------------------------------11 2. Literature Review -------------------------------------------------------------------------------- 12 2.1 Part I: Empirical Evidences on Short-run Pricing Performance --------------------- 12 2.1.1 Empirical Evidences from Chinese Markets -------------------------------------------- 12 2.1.2 Empirical Evidences from Indian Markets ---------------------------------------------- 14 2.1.3 Empirical Evidences from US Market --------------------------------------------------- 17 2.1.4 Empirical Evidences from Multi-regions and Markets Studies ----------------------- 19 2.1.5 Empirical Evidences from UK Market -------------------------------------------------- 19 2.1.6 Empirical Evidences from Emerging and Developing Market ----------------------- 20 2.1.8 Summary and Discourse Analysis onshort-run Pricing Performance of IPOs ------ 21 2.2 Part II: Evidences on Long-run Pricing Performance of IPOs ----------------------- 23 2.2.1