The Trading Performance of Underwriters in the SEO Aftermarket

• Main Authors: Kai-Ling Liu, 留凱玲
• Other Authors: Hsuan-Chi Chen
• Format: Others
• Language: en_US
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/47559647328044601602

碩士 === 元智大學 === 財務金融研究所 === 93 === This study examines the relationship between the aftermarket trading behavior and operating achievements of underwriters, by using the seasoned equity offerings issued in Taiwan from 2000 to 2003. Strong evidence reveals that lead underwriters have larger influence than co-managers. In addition, lead underwriters have better trading performance than co-managers only for the first several weeks. No matter what kinds of underwriters’ cumulative profits, buy-and-hold return, and wealth relative are significantly positive in the first several weeks. The first several weeks’ superior performance seems to be in virtue of underpricing. We find that EPS and initial return can interpret the cumulative profits. We find out that only initial return could explain the buy-and-hold returns and wealth relative. Lead underwriters, higher syndicate retention rate, and higher turnover rate can lead to the longer holding periods.