Identifying Gross Spread Pattern In Indonesian Initial Public Offering Market

DOI

10.2991/icied-17.2018.41How to use a DOI?

Keywords

Indonesian IPO market; gross spread; gross spread pattern

Abstract

Underpricing, which is considered as the implicit cost of going public, is not the only cost faced by issuers. Another cost of going public is gross spread or underwriting discounts (i.e., explicit cost). This paper examines the gross spread in the Indonesian IPO market over the period of 2007 to 2016. The Indonesian underwriting market is characterized by different fee setting practices which focus more on the management fee to undertake marketing campaigns or road shows to obtain information and opinion from informed and potential investors prior to setting the offering price and IPO allocation. Using the relative frequency of the mode spread, it revealed that Indonesian gross spread did not show high clustering pattern even though gross spread level of 2% emerged as the common spread

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Nur Aida Arifah Tara
AU  - Nada Kulendran
AU  - Riccardo Natoli
PY  - 2017/12
DA  - 2017/12
TI  - Identifying Gross Spread Pattern In Indonesian Initial Public Offering Market
BT  - Proceedings of the 2nd International Conference on Indonesian Economy and Development (ICIED 2017)
PB  - Atlantis Press
SP  - 215
EP  - 219
SN  - 2352-5398
UR  - https://doi.org/10.2991/icied-17.2018.41
DO  - 10.2991/icied-17.2018.41
ID  - AidaArifahTara2017/12
ER  -