Communication of Private Information and the Valuation of Initial Public Offerings in Singapore

20 Pages Posted: 15 Apr 2014

See all articles by Li Li Eng

Li Li Eng

National University of Singapore (NUS) - Department of Accounting

Andrew Khoo

National University of Singapore (NUS)

R.S.K. Tan

National University of Singapore

Date Written: June 1998

Abstract

This study examines a sample of 108 initial public offerings in Singapore between 1987 and 1993, and documents the effects of four channels of entrepreneurial communication, that is, retained ownership, audited report, auditor choice and underwriter choice on the valuation of new issues. Our results indicate that retained ownership and book value of equity are significantly and positively associated with the valuation of initial public offerings in Singapore. Underwriter choice and auditor choice are not significant in explaining the valuation of initial public offerings. Issues listed on the Main Board are valued higher than those on Sesdaq (Stock Exchange of Singapore Dealing and Automated Quotation). Firms choosing the auction system are valued higher than those choosing the fixed system. This paper provides evidence on the valuation of new issues in an emerging market in the Asia‐Pacific region. The results are of interest to investors, investment bankers and companies seeking a listing on the Singapore Stock Exchange. We provide some insights on how new issues in the Singapore market are valued.

Suggested Citation

Eng, Li Li and Khoo, Andrew and Tan, Ruth Seow Kuan, Communication of Private Information and the Valuation of Initial Public Offerings in Singapore (June 1998). Journal of International Financial Management & Accounting, Vol. 9, Issue 2, pp. 63-82, 1998, Available at SSRN: https://ssrn.com/abstract=2425002 or http://dx.doi.org/10.1111/1467-646X.00031

Li Li Eng

National University of Singapore (NUS) - Department of Accounting ( email )

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Andrew Khoo

National University of Singapore (NUS)

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Ruth Seow Kuan Tan

National University of Singapore ( email )

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