THE DYNAMICS OF INITIAL PRICE OFFERINGS IN DEREGULATED EMERGING AFRICAN CAPITAL MARKETSi
Joseph K. Achua
Benue State University, Nigeria
This study explores the impact of the rapid regulatory changes being experienced in emerging African capital markets on initial public offerings (IPO). Employing equally-weighted average, equity IPO are underpriced by 4.9 percent; and regression analysis shows that IPO volumes, offer size, the age of the firm before IPO, issuers‟ prospects and underwriters‟ reputation are not robust IPO returns‟ determinants, unlike market conditions and syndicate underwriting. The study confirms decreasing IPO underpricing and identifies changing dynamics of initial returns‟ determinants in response to regulatory refinements in Nigeria, an emerging African capital market. The implications of the findings are discussed.
Key words: Initial public offerings, underpricing, emerging African capital markets, Nigeria
JEL Codes:G12, L33