Effect of New IPO Issuance on the Secondary Market: Evidence from Dhaka Stock Exchange (Dse)
Jahangirnagar Economic Review, Vol.
The Secret Pre-IPO Market
17, No. 1, pp.
1-15, June 2006
13 PagesPosted: 15 Dec 2006
When there are new IPOs in the market, the question comes up how the investors show their interest towards the IPOs.
Do the investors mobilize their investments from secondary market to the IPO?
Because of such fund mobilization, do the transaction volumes or other variables like market capitalization and total turnover of stock exchange face any pressure? This paper tries to find out the answer whether because of investors' interest towards IPO creates a pressure on the performance of DSE variables like share price index, total turnover value (BDT), and market capitalization (BDT).
This paper finds that the impact of the IPOs on the DSE is not convincing. However, when the number of IPOs is huge during a certain time period, the market cannot ingest the IPO volumes, thus the impact of IPOs has been revealed as significant. And when the number of IPOs is very low, the impact is not significant.
This paper also finds that the size of the IPO has no role to influence the DSE variables.
Keywords: Initial Public Offering (IPO), Share Price Index, Total Turnover Value, and Market Capitalization
JEL Classification: G30
Suggested Citation:Suggested Citation
Hossain, Mohammad Farhad and Siddiquee, Mohammad and Islam, K.M.
Zahidul, Effect of New IPO Issuance on the Secondary Market: Evidence from Dhaka Stock Exchange (Dse). Available at SSRN: https://ssrn.com/abstract=920300