Browsing by Author "Saadouni, Brahim"

Now showing 1 - 5 of 5
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    The association between earnings forecast in IPO prospectuses and earnings management: An empirical analysis
    (Elsevier, 2017-09-01) Buchner, Axel; Mohamed, Abdulkadir; Saadouni, Brahim
    This paper examines the level of earnings management for large IPOs that provide earnings forecasts and those that do not provide forecasts in the IPO prospectus. Using a sample f 368 IPO firms listed on the London Stock Exchange between 1985 and 2012, we find that the level of earnings management is lower for IPOs that provided earnings forecasts, than for those which did not provide a forecast. This evidence is robust, controlling for endogeneity and sample selection. Further tests reveal that IPOs that provide forecasts outperform their counterparts in the long run, using various long term performance measures. Overall, our results suggest that earnings forecasts at the time of listing convey useful information to investors on the quality of the company listing in the market.
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    Committed anchor investment and IPO Survival – the roles of cornerstone and strategic investors
    (Elsevier, 2016-08-31) Espenlaub, Susanne; Khurshed, Arif; Mohamed, Abdulkadir; Saadouni, Brahim
    Recent U.S. policy encourages anchor investments to facilitate initial public offerings (IPOs) and increase companies' access to external finance. As access to external funds relies on stocks remaining listed, we study anchor investors' impact on how long IPOs stay listed. We examine two types of anchor investors in Hong Kong: strategic and cornerstone investors, that are similar to U.S. anchor investors, but show varying levels of commitment to the IPO. We find that IPOs backed by more committed investors, with longer post-IPO commitments (lockups), stay listed longer. This suggests that the success of U.S. policies may require investors' commitment.
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    Price reaction of ethically screened stocks: a study of the Dow Jones Islamic Market World Index
    (Springer, 2016-11-26) Mazouz, Khelifa; Mohamed, Abdulkadir; Saadouni, Brahim
    This paper investigates the short-term effects on the price of the ethically screened stocks of the Dow Jones Islamic Market World Index (DJIMWI) quarterly revisions. Using a sample of 8250 stocks from May 1999 through June 2012, we find a significant price reaction of the ethically screened stocks following additions and deletions. The results show that additions (deletions) from emerging stock markets tend to experience a greater and significantly positive (negative) price response than additions (deletions) from the developed markets. Further tests reveal that the price reactions following DJIMWI revisions are likely to be driven by shifts in investor sentiment rather than changes in firm fundamentals.
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    Stock return comovement around the Dow Jones Islamic Market World Index revisions
    (Elsevier, 2016-05-18) Mazouz, Khelifa; Mohamed, Abdulkadir; Saadouni, Brahim
    We examine patterns of comovement in stock returns around the Dow Jones Islamic Market World Index (DJIMWI) quarterly revision events. Our analysis is based on a sample of 8250 companies from eighteen countries during the period May 1999–June 2012. We find that a stock’s comovement with the DJIMWI increases when it joins and decreases when it leaves the index. We also find that the comovement of newly added (deleted) stocks with the existing DJIMWI constituents increases (declines) during periods of high trading activity and during the month of Ramadan. Further tests reveal that changes in the fundamentals have no impact on the comovements of added and deleted stocks. Overall, our results indicate that stock returns respond to the emotional state of investors around information-free events.
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    Underwriters' allocation with and without discretionary power: evidence from the Hong Kong IPO market
    (Elsevier, 2017-01-03) Mazouz, Khelifa; Mohamed, Abdulkadir; Saadouni, Brahim; Yin, Shuxing
    This study uses a unique and extensive data set from the Hong Kong IPO market to examine the theory of adverse selection under two distinct regulatory regimes in relation to underwriters' discretionary power in IPO share allocation. Consistent with Rock's (1986) theory of adverse selection in the IPO market, we show that, prior to the introduction of the clawback provision; retail (uninformed) investors were allocated more of the overpriced offerings and less of the underpriced issues. However, after the provision is implemented, retail investors have been allocated significantly more of the underpriced offerings and less of the overpriced ones. Overall, we find that allocation-adjusted initial returns for the retail investors are lower (higher) than the risk-free rate pre- (post-) clawback provision. These findings imply that the mandatory clawback provision has enhanced the fairness in IPO share allocations among different investor groups and has reduced the winner's curse in the IPO market.