Shareholder retention influence on the flipping activity of Malaysian IPOs

R. Mohd-Rashid, Ruzita Abdul Rahim, N. Che-Yahya

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

The high initial trading volume following an IPO listing is an anomaly in the aftermarket and this activity is mainly caused by the flipping activity of flippers. Therefore, this study argues that investors' interest could be one of the factors that trigger flipping activity. This study uses the signalling theory argument, whereby the proportion of shareholder retention sends a credible signal to investors and sways flipping activity. Using cross section and quantile regression in high and median quintiles, this study found a significant positive relationship between shareholder retention and flipping activity. The finding suggests that to increase the liquidity of the IPOs in the immediate aftermarket, the shareholders have to retain a higher proportion of shares in order to signal the quality and prospects of the IPOs.

Original languageEnglish
Pages (from-to)133-144
Number of pages12
JournalPertanika Journal of Social Sciences and Humanities
Volume24
Issue numberMay
Publication statusPublished - 1 May 2016

Fingerprint

shareholder
investor
liquidity
Shareholders
regression
Proportion
Aftermarket
Investors

Keywords

  • Flipping activity
  • IPOs
  • Liquidity
  • Quantile
  • Retention
  • Shareholder
  • Signal
  • Underprice

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Arts and Humanities(all)
  • Social Sciences(all)
  • Economics, Econometrics and Finance(all)

Cite this

Shareholder retention influence on the flipping activity of Malaysian IPOs. / Mohd-Rashid, R.; Abdul Rahim, Ruzita; Che-Yahya, N.

In: Pertanika Journal of Social Sciences and Humanities, Vol. 24, No. May, 01.05.2016, p. 133-144.

Research output: Contribution to journalArticle

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