Abstract
The market behaviour of unseasoned new issues of common stock at the time of initial listing and during the period following initial listing on the Sydney Stock Exchange is investigated. The results indicate large and widespread initial returns to the new issue-cum-listing process. The average aftermarket performance was negative but was not statistically significant. We suggest that the joint process of initial issue-cum-listing in Australia, the listing requirements of the Australian Associated Stock Exchanges and the vesting of allocation rights to the issue in the broker, together with barriers to entry to stockbroking in Australia, provided the market structure which facilitated underpricing of the new issues.
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