Abnormal returns in privatization public offerings: the case of Portuguese firms

• Type: Article in International Scientific Journal
• Date: 2006

Authors

Vieira, C (Author) Other; Serra, AP (Author) FEP

Journal

Title: Notas Económicas

No. 52

ISSN: 0872-4733

Publisher: Impactum-Journals

Other information

Authenticus ID: P-00Y-FHB

DOI: 10.14195/2183-203x_23_1

Abstract (EN): <jats:p>This paper provides evidence on abnormal returns of Portuguese privatization public offerings for the period from 1989 to 2001. This study explores the abnormal performance of a comprehensive sample of Portuguese privatization transactions and investigates the determinants of the observed price behavior. We find some evidence of the underpricing phenomenon for privatized offerings but initial returns are low and barely significant. The results show further that privatization IPOs underperform private sector IPOs. In the long run, we observe negative abnormal returns. While in early event months, privatization public offerings yield more negative returns than private sector offerings, this effect is reversed in longer horizon periods. Initial underpricing is thus partially reversed and investors seem to require higher returns in partial privatizations.</jats:p>

Language: English

Type (Professor's evaluation): Scientific