Abstract
Purpose: The core purpose of this paper empirically study of the initial public offerings (IPOs) of companies accepted in oil and chemical industries. The paper attempts to answer the question of is there any abnormal return from IPOs in listed companies in Tehran Stock Exchange (TSE).Design/methodology/approach: This research is an applied research, and its design is empirical, which is done by the method of post-event (past information). For the purpose of the study the t-statistic, regression and variance analyses are applied to examine the hypotheses. We use in the analyses a sample of 29 newly accepted Iranian oil and chemical companies listed on TSE for the period of 2001 to 2012. This paper has studied abnormal return and three abnormal phenomena have been considered in capital market. These phenomena consist: (1) underpricing or overpricing of the firm's stock, (2) lower or higher stock return of the firms and (3) Particular period in market for stock transactions volume.Findings: The results support the hypothesis that there is a positive abnormal return to investing in the newly accepted oil and chemical firms for stockholders. It also shown the firm size is the only factor that can affect the stock abnormal return. With considering significance level, investors have to give attention sequentially to other variables such as stock ownership centralization, going public time and stock offering volume.
Highlights
Changing the consumption pattern has increased the requirement for unnatural substitute goods and "petrochemical industry" has become an important industry in regard to artificial materials and products varieties
The results of this study showed that the behavior pattern of new stock return in Tehran Stock Exchange (TSE) is similar to other countries approximately, and the people, who have bought the new stocks at the primary issue in the stock exchange, get more return comparing to the market return, if they sell their stock two months later
Secondary Hypotheses: H01: There is no meaningful relation between stock offering volume and abnormal return of initial public offerings (IPOs) price in oil and chemical firms
Summary
Changing the consumption pattern has increased the requirement for unnatural substitute goods and "petrochemical industry" has become an important industry in regard to artificial materials and products varieties This industry was extended in Europe first, and in the U.S Investing is justifiable in this industry because of its eminent role in value added of crude oil and gas. The trend of stock pricing in initial public offering by active firms in oil and chemical industries in TSE is evaluated precisely. We have studied a special aspect of stock exchange activities that can be considered as an effective factor on stock exchange and its desirable efficiency Paying attention to this fact that determining the stock price even in countries with advanced capital market encounters many difficulties, pricing should be fulfilled precisely in stock public offering. If the stock price decreases or does not increase after the initial public offering, people will incur a loss
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