3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item Long run performance of IPO'S on the JSE: taking it to 10 years(2018) Agostinetto, LucianoThis paper investigates the long run performance of 270 South African IPOs during the period 1996 to 2016. Significant under-pricing in the short term and underperformance in the long term is found for equally-weighted event time CARs and buy-and-hold returns using two market benchmarks. This study took the long-term period past five years all the way to ten years to investigate if long-run underperformance persists in South African IPOs. It is found that underperformance persists in IPOs that list on the JSE and this underperformance can be explained by the window of opportunity hypothesis.Item Stock price reaction to dividend changes: an empirical analysis of the Johannesburg Securities Exchange(2012-05-22) Lentsoane, EnosThis paper provides an empirical analysis of the stock price behaviour of firms listed on the Johannesburg Securities Exchange (JSE) around corporate events relating to final cash dividend change announcements over the period 2004 to 2009. Declared for the financial year-end, final cash dividend announcements either represent an increase, a reduction or no change relative to the previous year’s announcement. In this paper we analyse the stock price behaviour of firms that announced dividend reductions before and during the Global Financial Crisis of 2007 (GFC 2007). The pre-crisis analysis focuses on dividend reduction effects on share price during normal economic times and crisis analysis focuses on effects during economic downturn. We refer to the pre and during crises effects as firm-specific and systemic effects respectively. Studies about the general effect of dividend announcements on shareholder value are well documented; however our study is motivated by the fact that there has not been an abundance of forthcoming research in South Africa pertaining to how share prices have reacted to dividend reductions before and during the GFC 2007. We employ an event study methodology in the context of this emerging market to assess the share price behaviour to dividend reductions. Integral to an event study methodology in the corporate context, is the analysis of abnormal performance around the event date. Abnormal performance is measured by employing three widely used quantitative approaches namely, the market-adjusted, market model and the buy-and-hold abnormal return approaches. Based on daily closing share price information collected from iNet Bridge database, abnormal performance is calculated from 2004 to 2009 while controlling for the contemporaneous effect of earnings announcements (earnings data collected from Bloomberg database) occurring within 10 trading days of dividend announcement. The analysis shows that the market reaction is not statistically significant on the announcement day and that more negative returns occur during the pre-crisis period. Volatility of abnormal returns is higher during the pre-crisis period. The research does not support the Irrelevance Theory but seems to support the signalling hypothesis.