THE PERFORMANCE OF REAL ESTATE IPOS IN SINGAPORE

Abstract

This study presents empirical evidence for a sample of 130 non-real estate related and 4 real estate related initial public offerings (IPOs) over the period 1997 to 2004. It explores the relationship between the underwriter's reputation and the mean initial day return of the IPOs. It also examines factors affecting the initial day return of the real estate related IPOs and their long-run performances. To understand the performance of real estate related IPOs, we first review the theory on IPO activity: why firms go public, the anomalous phenomenon of underpricing and how IPOs perform in the long run. Using regression model and cumulative average daily returns (CARs), we attempt to explain the observed low initial day return of real estate related IPOs based on 4 independent variables and to investigate their long run performances by comparing the results with that of non-real estate related IPOs.