The short and long term price performance of initial public offerings in Istanbul Stock Exchange

Abstract

The present study aims at investigating the price performance of IPO’s in the Istanbul Stock Exchange (ISE) during the 1990-95 period in the short term and long term. The study is also devoted to the procedures for an Initial Public Offerings (IPO) and the existing regulatory environment. The existence of significant abnormal positive returns of new issues on the first day of trading is the proof of underpricing hence investors taking a position in IPO’s during the offering date can enjoy short term return relative to the market. However, on the average, cumulative abnormal returns do not exhibit any significant long term anomaly measured over 750 trading days.