Private placement, share prices, volume and financial crisis: an emerging market study
Firms are increasingly resorting to private placements in recent years, yet there is no published study of emerging markets. There is a unique opportunity to study this behavior during a severe financial crisis, when firms resorted to private placements to recover financially distressed firms. Our a...
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| Format: | Article |
| Language: | English |
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Elsevier
2013
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| Online Access: | http://psasir.upm.edu.my/id/eprint/28345/ http://psasir.upm.edu.my/id/eprint/28345/2/Private%20placement.pdf |
| _version_ | 1848846092180914176 |
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| author | Mohd Noor, Normaziah Hassan, Taufiq Ariff, Mohamed Mohamad, Shamsher |
| author_facet | Mohd Noor, Normaziah Hassan, Taufiq Ariff, Mohamed Mohamad, Shamsher |
| author_sort | Mohd Noor, Normaziah |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Firms are increasingly resorting to private placements in recent years, yet there is no published study of emerging markets. There is a unique opportunity to study this behavior during a severe financial crisis, when firms resorted to private placements to recover financially distressed firms. Our analysis using data over fifteen years shows (a) a significant 2–3% positive share price reaction, affirming asymmetric information effect, (b) a significant volume activity, and (c) the price impact is different across a period of a major financial crisis. If the proceeds from placement are earmarked for investment, share price is negatively (positively) correlated during the crisis (non-crisis) periods. Our finding on regulation is inconsistent with prior reports in developed markets: this is explained by the stricter restrictions on trading of private issues in emerging market. These results provide modest new contributions to the literature on private placements. |
| first_indexed | 2025-11-15T08:57:13Z |
| format | Article |
| id | upm-28345 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T08:57:13Z |
| publishDate | 2013 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-283452015-10-08T07:01:34Z http://psasir.upm.edu.my/id/eprint/28345/ Private placement, share prices, volume and financial crisis: an emerging market study Mohd Noor, Normaziah Hassan, Taufiq Ariff, Mohamed Mohamad, Shamsher Firms are increasingly resorting to private placements in recent years, yet there is no published study of emerging markets. There is a unique opportunity to study this behavior during a severe financial crisis, when firms resorted to private placements to recover financially distressed firms. Our analysis using data over fifteen years shows (a) a significant 2–3% positive share price reaction, affirming asymmetric information effect, (b) a significant volume activity, and (c) the price impact is different across a period of a major financial crisis. If the proceeds from placement are earmarked for investment, share price is negatively (positively) correlated during the crisis (non-crisis) periods. Our finding on regulation is inconsistent with prior reports in developed markets: this is explained by the stricter restrictions on trading of private issues in emerging market. These results provide modest new contributions to the literature on private placements. Elsevier 2013 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/28345/2/Private%20placement.pdf Mohd Noor, Normaziah and Hassan, Taufiq and Ariff, Mohamed and Mohamad, Shamsher (2013) Private placement, share prices, volume and financial crisis: an emerging market study. Global Finance Journal, 24 (3). pp. 203-221. ISSN 1044-0283 10.1016/j.gfj.2013.10.003 |
| spellingShingle | Mohd Noor, Normaziah Hassan, Taufiq Ariff, Mohamed Mohamad, Shamsher Private placement, share prices, volume and financial crisis: an emerging market study |
| title | Private placement, share prices, volume and financial crisis: an emerging market study |
| title_full | Private placement, share prices, volume and financial crisis: an emerging market study |
| title_fullStr | Private placement, share prices, volume and financial crisis: an emerging market study |
| title_full_unstemmed | Private placement, share prices, volume and financial crisis: an emerging market study |
| title_short | Private placement, share prices, volume and financial crisis: an emerging market study |
| title_sort | private placement, share prices, volume and financial crisis: an emerging market study |
| url | http://psasir.upm.edu.my/id/eprint/28345/ http://psasir.upm.edu.my/id/eprint/28345/ http://psasir.upm.edu.my/id/eprint/28345/2/Private%20placement.pdf |