Danske børsintroduktioner: En analyse af underprisfastsættelse i Danmark

Taylan Secilmis

Student thesis: Master thesis


Introduction: Underpricing in connection with IPOs have always been subject of much discussion for investors and researchers, and therefore has created an extensive literature of different theories that try to explain the subject. For the Danish stock market is so far no studies that have examined the relationship between information and the pricing according to IPO. The purpose of this thesis is to investigate underpricing of the Danish stock market in the period 1996 to 2015 as well as to analyze the factors that may explain the results of the underpricing. Additionally, the aim of the thesis is to contribute to the Danish IPO literature and give some recommendations to investors about investments in IPO.
Data and methods: The research is performed by statistical analysis and by setting 5 hypotheses that attempt to test the significance of the found underpricing, and factors that significantly can explain underpricing in the Danish stock market. The whole sample consists of 47 IPOs in the Danish stock market during the research period.
Results: The thesis find an adjusted average initial return of 8.45% of underpricing in the Danish stock market. The test of the hypothesis is significantly by a significant level of 1%. The other hypotheses was tested for factors as underwriter, introduction method, industry, and hot issue market. The statistical analysis’ show that the factors introduction method, industry, and hot market could explain underpricing, but the result of the hypotheses are not significant at the level of 5%. The underwriter factor was rejected as it shows no differences between underwriters.
Conclusion: Danish IPOs shows moderate level of underpricing which is consistent with previous research studies performed in the Danish stock market. The result of the underpricing rate cannot be
explained by the tested hypotheses factors. When the results do not obtain a confidence level of 95% it is not certainty to make a conclusion of the result, as the same result can occur by coincidence. Lack of significant may be caused by a small sample size of the Danish stock market, and it may help to explain why there are made very few research studies of the stock market. The recommendations to investors is that they should invest in IPOs, as it gives an average one day return of 8.45%, which is great, but it is not possible to predict the underpricing, based on information given prior to the IPO.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2016
Number of pages91