Post IPO Financial performance in the banking sector
empirical evidence from the West African Economic and Monetary Union (UEMOA) banks listed on the Regional Stock Exchange (BRVM)
DOI:
https://doi.org/10.59051/joaf.v12i1.469Keywords:
underpricing; Initial Public Offering; Buy and Hold; BRVM; WAEMUAbstract
Objective: This research examines the post-IPO financial performance on the West African Economic and Monetary Union’s Stock Exchange and specifically in the banking industry.
Methodology: I employ the event-time methodology based on cumulative abnormal returns and buy and hold abnormal returns.
Findings: Findings indicate that the phenomenon of underpricing is indeed a reality in the banking industry. However, compared to several previous works, this underpricingis low. Moreover, the financial performance of these banks deteriorates between the first month of listing and the third year. However, the adoption of a market value weighted buy-and-hold strategy allows investors to generate considerable profits in the long run.
Originality: The originality of this investigation lies in the fact that it explores a theme that has been little investigated in previous studies, namely IPOs in the banking industry. In addition, the results of this paper provide diversification opportunities for investors.
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