| Vietnamese stock market has just been established since 2000,its development time is less than 20 years.However,it has made great achievements: market scale has been continuously expanding,products are more and more abundant,and market liquidity is increasing.At present,Vietnam's macro economy is good,Vietnamese stock market will join the world's most influential MSCI emerging markets index in 2020.Vietnamese government has introduced many policies to support Vietnamese stock market.In this context,Vietnamese stock market will become one of the most attractive markets in the world,with very good investment opportunities,and it will attract a lot of international capital in the future,which is the driving force for the rise of Vietnamese stock market.As a result,the IPO activities in Vietnamese stock market are more and more concerned by people,and the issues of IPO underpricing and long-term performance in Vietnamese stock market have become the research object of scholars.After reading the IPO literature in Vietnam,I found the following matters being noteworthy: First,from 2010 to 2018,the IPO activities in Vietnamese stock market keep developing,especially in 2018,the IPO of Vietnamese stock market had a new breakthrough,Vietnam surpassed Singapore as the first IPO country in Southeast Asia,Vietnam will still stay in the first place in 2019-2021.It can be seen that IPO has gradually become an important financing channel for Vietnamese companies.Therefore,whether IPO pricing is effective and how to reduce the financing cost in Vietnam attracted the attention of people.Second,among all Vietnamese IPO stocks,45.4% of the stocks have negative abnormal returns(AR),which rarely happens in other markets.This significantly reduced the level of IPO underpricing in Vietnamese stock market,but it does not mean that the pricing efficiency has improved.Therefore,what causes this strange phenomenon and what factors affect the underpricing and the long-term performance of Vietnamese IPO stocks are worthy of further discussion.Third,compared with the two stock markets of The United States and China,in Vietnamese stock market,some places are the same as the United States,some are the same as China,but some are unique.Most notably,in Vietnamese stock market,the time distance from the date of IPO application to the first day of listing and trading is generally long,which is totally different from The United States and China.Therefore,it is reasonable to suspect that the IPO pricing problem and the long-term performance in Vietnamese stock market are different from The United States,China and other countries.Fourth,in the past few years,foreign investors and international capital have been constantly entering Vietnamese stock market,and they have actively participated in the IPO activities in Vietnam.As the average value of the buying proportion of foreign investors for IPO shares increases,the average value of the abnormal return of IPO shares from IPO date to the first day of trading decreases.Can this explain that the purchase behavior of foreign investors improves the pricing efficiency of Vietnam's IPO,that is,reduces the IPO underpricing level in Vietnam? Fifth,at present,Vietnamese government has constantly launched many policies to attract foreign investors to participate in Vietnam's IPO activities.From the perspective of these practical actions,whether Vietnamese government is utilizing foreign capital to reduce the financing cost and to improve the pricing efficiency of IPO in Vietnam?In the context of the above description,I think it is worth studying the underpricing and the long term performance of IPO stocks in Vietnamese market.The research ideas and methods of this paper are as follows: First of all,this paper makes statistics and introduction to the previous theoretical and empirical results of the research on the influencing factors of IPO underpricing,and long term performance, toacquaint the current research situation of scholars on this issue,so as to prepare for the later research and analysis.Next,this paper introduces the development history of Vietnamese stock market,the legal provisions and implementation steps related to IPO,as well as foreign investors' investment in Vietnamese stock market.At the same time,this paper compares the IPO activities of Vietnamese stock market with The United States and China.After the end of the theoretical part,this paper enters the empirical part:First of all,this paper studies the influencing factors of the IPO underpricing in Vietnam by establishing a multiple linear regression model.In this part,based on the differences of IPO between Vietnamese stock market and other markets,this paper takes the lag of listing time(the time distance from IPO date to the first day of listing)and foreign investors factor into account.Then,in the part of studying the long term performance of Vietnamese IPO stocks,this paper calculates four indexes of abnormal return(AR),cumulative abnormal return(CAR),buy and hold abnormal return(BHAR),and wealth relative index(WR)to visually examine whether Vietnamese IPO stocks have long term weak performance.In order to study whether the long term performance of Vietnamese IPO stocks is explained by market factors,this paper uses three factors and five factors models.In addition,this paper studies the influencing factors of the long term performance of Vietnamese IPO stocks by establishing a multiple linear regression model.Finally,on the basis of the results,this paper puts forward suggestions to the investors and the relevant departments in Vietnamese stock market.The main results of this paper are as follows: First,the IPO activities in Vietnamese stock market are under priced.According to the two methods of AR and MAAR,the IPO underpricing level of Vietnamese stock market is 14.48% and 21.01% respectively.Compared with the international markets,the IPO underpricing level of Vietnamese stock market is not very high.Second,the factor of foreign investors is significantly negatively correlated with the IPO underpricing in Vietnam,while the factor of lagged listing time is not correlated;other factors that are correlated with the IPO underpricing level are: company size,IPO price,market conditions,proportion of over subscription.Third,the abnormal return(AR),cumulative abnormal return(CAR),buy and hold abnormal return(BHAR)and wealth relative index(WR)of Vietnamese IPO stocks portfolio prove that there is a long-term weak performance of the IPO stocks in Vietnamese stock market.Fourth,there are six factors including the IPO issue size,profitability(ROE),foreign investor purchase behavior,IPO underpricing issuance level,the number of listed companies in the same period,and the first-day turnover rate have impact on Vietnamese IPO stock's long-term performance. |
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