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Seasoned equity offerings in an emerging market: evidence from Thailand.

Lerskullawat, Polwat (2011)
Ph.D. thesis, University of Birmingham.

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Researchers have developed investigations into both initial and seasoned equity offering (SEO) by obtaining data from developed markets (e.g. Denis, 1994; Kothari and Warner, 1997; Corwin, 2003; Eckbo et al., 2006), while the literature in emerging markets is relatively neglected. This thesis provides an overview examination of one specific emerging region, namely Thailand. Equity financing in Thailand has become more widespread in the aftermath of the last economic crisis in 1997. With a more recent data set and larger sample size than previous Thai studies, we examine the performance of SEO firms between 1999 and 2006. Our thesis findings contribute to the existing literature by: (1) examining the SEO samples which focus mainly on issuing new shares to existing shareholders, i.e. rights issuing and private placement, instead of the general aspect of public offering, (2) applying a different benchmark to measure post-issuing performance compared with existing studies and (3) examining the relationship between short-term and long-term abnormal returns. Our evidence reveals that the stock prices react negatively to SEO announcements. We also find that there is no relationship between short- and long-term abnormal returns. This is a consistent explanation of the characteristics of the Thai capital market in practice. In addition, our results from the determinants of SEO underpricing are mostly consistent with the previous literature (i.e. Corwin, 2003; Intintoli and Kahle, 2009). Lastly, our findings suggest that SEO firms underperform during the post-issuing period, particularly one year after issuing new shares.

Type of Work:Ph.D. thesis.
Supervisor(s):Jelic, Ranko and Theobald, Michael
School/Faculty:Colleges (2008 onwards) > College of Social Sciences
Department:Department of Accounting and Finance, Birmingham Business School
Subjects:HB Economic Theory
HF Commerce
HG Finance
Institution:University of Birmingham
ID Code:3139
This unpublished thesis/dissertation is copyright of the author and/or third parties. The intellectual property rights of the author or third parties in respect of this work are as defined by The Copyright Designs and Patents Act 1988 or as modified by any successor legislation. Any use made of information contained in this thesis/dissertation must be in accordance with that legislation and must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the permission of the copyright holder.
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