Inflation Monitor, Muhammad Arby, Fida Hussain, Safdar Khan
May 2006
Inflation Monitor, Muhammad Arby, Fida Hussain, Safdar Khan
Safdar Khan
Extract:
Although inflationary pressures persisted in the economy for the second year in a row, the headline inflation fell to 7.6 percent year-on-year in June 2006 that was 1 percentage point less than inflation in corresponding month last year.1 The inflation containment was more visible in the last six months of FY06 as compared to first six months (Jul 05 to Dec 05): the average CPI inflation during the first half of the year was 8.4 percent which declined to 7.4 percent in the second half primarily due to fall in food inflation. Inflation measured by sensitive price indicator also …
Dynamics Of Energy Consumption, Safdar Khan
Dec 2005
Dynamics Of Energy Consumption, Safdar Khan
Safdar Khan
Extract:
Dynamics of Energy Consumption Pakistan has been facing severe imbalances in energy demand and supply for the last couple of decades. During early 1980s domestic supply of energy was fulfilling almost 86 percent of total domestic energy demand; a gap of 14 percent was being filled by imports. However, the demand – supply gap started increasing since then and reached to almost 47 percent by the year 2000 (see Figure S2.1).
Ipo Long-Run Returns: A New Approach, Steven Dolvin, Mark Pyles
Dec 2005
Ipo Long-Run Returns: A New Approach, Steven Dolvin, Mark Pyles
Steven D. Dolvin
The long-run underperformance of initial public offerings (IPOs) is heavily documented; however, researchers have been unable to consistently determine which IPO characteristics affect the level of underperformance. Our main contribution is to examine this relation using a unique, alternative approach that concentrates on pairs of IPOs issued on the same day, thereby avoiding many of the biases (e.g., overlapping time periods) embedded in previous studies. Over the period 1986 to 2000 we find that issues with lower initial returns, higher quality underwriters, and/or high technology status tend to have higher long-run returns. Note: Link is to the article on the …
Venture Capitalist Quality And Ipo Certification, Steven Dolvin, Mark Pyles
Dec 2005
Venture Capitalist Quality And Ipo Certification, Steven Dolvin, Mark Pyles
Steven D. Dolvin
The opportunity cost of going public is directly related to the level of information asymmetry associated with the issuing firm. Independent third parties, such as underwriters and venture capitalists, are believed to mitigate this asymmetry through certification, thereby reducing this cost. Existing studies illustrate that higher quality underwriters provide increased certification value; however, current research is essentially mute with regard to the effect of venture capitalist quality. We fill this gap, finding that higher quality venture capitalists also provide incremental certification value relative to those of lower quality. Additionally, we suggest that the most appropriate measure of venture capitalist quality …
Penny Stock Ipos, Steven Dolvin, Daniel Bradley, John Cooney, Jr., Bradford Jordan
Dec 2005
Penny Stock Ipos, Steven Dolvin, Daniel Bradley, John Cooney, Jr., Bradford Jordan
Steven D. Dolvin
We examine underpricing, long-run returns, lockup periods, and gross spreads for penny stock IPOs over the 1990-1998 period. We find that penny stock IPOs have higher initial returns than ordinary IPOs, but significantly worse long-run underperformance. We also find that penny stock IPOs have longer lockup periods and larger gross spreads. To explore the effect of potential market manipulation, we examine IPOs led by a group of underwriters that were the subject of SEC enforcement actions and/or other penalties. Penny stock issues led by these banks are particularly underpriced and underperform ordinary IPOs led by other underwriters. Note: Link is …
Do Underwriters Create Value For Issuers By Subjectively Determining Offer Prices?, Steven Dolvin
Dec 2005
Do Underwriters Create Value For Issuers By Subjectively Determining Offer Prices?, Steven Dolvin
Steven D. Dolvin
Many existing theories attempt to explain initial public offering (IPO) underpricing by suggesting that underwriters purposefully set offer prices below market value. These theories implicitly assume that underwriters have perfect foresight and can, with complete accuracy, place a value on issuing firms. This chapter evaluates this assumption by comparing offer prices set by underwriters to prices from three objective, valuation-based approaches. Relative to these estimates, the offer prices chosen by underwriters result in lower levels of underpricing, suggesting that the prices underwriters select are actually value creating for issuing firms in that they reduce the opportunity cost of issuance. Within …
