A study on performance of new issues on Main Board for 1990-1996 (June) / Rosmawee Shuhaimin

Basically this study based on performance of new issues in Main Board from 1990 to 1996 (as at June). There are 123 counters all together and can be divided into nine sectors, there are Consumer Product, Industrial Product, Construction, Trade & Services, Properties, Plantation, Hotel, Trust, and Finance. The period of measurement can be divided into 1 week, 1 month, 3 months, 6 months, 9 months and 1 year respectively. The analysis can be divided into three sections. First section is performance of new issues according to year with three sub-section. There are market return, stock return based on subscription price and opening price. Second section is performance based on sectors by using stock return measurement. Third section analyse relationship between market return and stock return. Please note that stock return based on subscription price is the one that is in consideration. The study have shown that most of the new issues which are bought based on subscription price are underpriced. Majority of them gain about 100%-and over. Whereas if it is based on opening price the investors is not going to gain much as compared to investors who bought based on subscription price. The highest returns is 466.67% under industrial sector. However construction and properties are also included in most outstanding positive return. Usually the new issues gives better return which it is traded in the 1st year. In terms of relationship they are inversely and directly related.