The Relationship Between Political Forces And Excess Return of Initial Public Offerings

• Main Authors: Chun-Hsien Yu, 尤淳嫻
• Other Authors: Chao-Hsien Lin
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/95833574237769649444

碩士 === 國立高雄第一科技大學 === 財務管理所 === 97 === In Taiwan, the newly public companies would experience a period of price rising when they went initial public offerings (IPOs) , and the phenomenon of abnormal return is existed. The situation of abnormal return would continue for a period and that is the so-call “honeymoon period”. This research is trying to determine whether those IPOs invested by China Development Corporation would experience excess return compared with other IPOs sold by Grand Cathay Securities Corporation and Taishin Securities Co Ltd. during 1992 to 2000, when Lee Teng-hui was the president of Taiwan and Liu Tai-ying the chairman of China Development Corporation. Base on the relationship between “relative amount”, “investment ownership” and excess return, this research would discuss whether the “political factors” would affect the price of IPOs or not. The empirical results are shown as follows:The abnormal return ratio of IPOs of those companies invested by China Development Corporation were all higher than those sold by Grand Cathay Securities Co. and Taishin Securities Co Ltd.; and the result of t-test shows that on 7th , 14th , 21st , 30th and 60th day it’s all noticeable. Therefore, we can prove that the abnormal return situation does exist at the early stage when those companies went public. The more investment ownership and relative amount of China Development Co. on those companies, the more excess return. Therefore, this research concluded that apart from the factors discuss in references there are also many other uncertain political factors could affect the performance of the stock price and excess return of those companies invested by China Development Co.