The Long-run Abnormal Performance Of Jordanian Initial Public Offerings ( IPOs ) Listed In Amman Stock Exchange During The Period ( 1993 - 2011 )

Abstract

Abstract This study aims at verifying the long-run abnormal performance for the Jordanian initial public offerings (IPOs) listed in Amman stock exchange during the period from (1st January,1993 until 31st December, 2011). In order to achieve the study objectives, the researchers applied the most common approach in the previous literature which is called ''The Event Study'' on the study sample which consisted of all the Jordanian initial public offerings that are listed in Amman stock exchange during the study period, which were (119) companies .Then, the researchers calculated the monthly returns for these companies for 60 months (5years) after public offering. In order to explore the long-run abnormal performance, the researchers applied three major aggregating models which are: Firstly, the cumulative abnormal returns (CAR). Secondly, the buy and hold abnormal returns (BHAR). Thirdly, the wealth relative model (WR). The researchers also chooses three major benchmarks which are: the general monthly index for Amman stock exchange weighted by market capitalization (ASEI), the matching firms (MF) for the Jordanian initial public offerings in terms of the (size, age, and sector) as much as possible, which also already exist in the market, and their stocks traded in the Amman stock exchange and the capital assets pricing model (CAPM).