Finance Brown Bag Seminar（2016-02）

Topic:Analyst Coverage in the Premarket of IPOs

Speaker:Chunxin Jia, Peking University

Time:Friday, 8 April, 11:30-13:00

Place:Room 217, Guanghua Building 2

Abstract:

Using a sample of IPOs from China, we show that greater premarket analyst coverage and more optimistic forecasts have a significant positive impact on offer price revisions. Optimistic research also has a significant positive impact on first-day returns. We further show that both expected and unexpected coverage positively impact IPO pricing, but only unexpected optimism have a similar effect. Analysts with connections to the underwriter are more likely to cover an IPO, but their coverage is not more optimistic. Interestingly, unlike the pattern in other countries, offer price revisions are negatively related to initial returns because underwriters cannot use allocations to reward regular investors in China. Overall, we show that premarket analyst research helps improve IPO pricing.

Introduction:

Chunxin Jia is a Professor of Finance at the Guanghua School of Management, Peking University. He joined Guanghua in 1999 and has been a full professor since 2010. His research interests are Financial Markets and Institutions, Corporate Governance, IPO, Financial Development.

http://www.gsm.pku.edu.cn/faculty/en/cjia.html

Your participation is warmly welcomed!