ATTENTION/WARNING - NE PAS DÉPOSER ICI/DO NOT SUBMIT HERE

Ceci est la version de TEST de DIAL.mem. Veuillez ne pas soumettre votre mémoire sur ce site mais bien à l'URL suivante: 'https://thesis.dial.uclouvain.be'.
This is the TEST version of DIAL.mem. Please use the following URL to submit your master thesis: 'https://thesis.dial.uclouvain.be'.
 

An analysis of the indirect costs associated with private placements on the Oslo stock exchange: Evidence from 2000 to 2014

Epland, Aleksander
(2018)

Files

Epland_20881301_2015.pdf
  • Closed access
  • Adobe PDF
  • 647.61 KB

Details

Supervisors
Iania, Leonardo ; Leite, Tore
Faculty
Louvain School of Management
Degree label
Master [120] en sciences de gestion
Abstract
This thesis investigates the indirect costs associated with private placements carried out on the Oslo Stock exchange. The analysis is centred around three main areas. First, the conducted event study identifies an average abnormal return of -3.29% upon the announcement of a private placement. The offer price discount seems to have a large impact on the observed market reaction. On order to further analyse this topic the discount adjusted abnormal returns are calculated. The discount adjusted returns suggests that private placements are negatively perceived by the market also after adjusting for the offer price discount. The second part deals with the offer price discount. The average offer is placed at a substantial discount. Several firm and offer characteristics are analysed. The relative size of the placement and the idiosyncratic risk associated with a firm, are found to have a significant impact on the offer price discount. The observed offer price discount are found to increase with the amount of idiosyncratic risk associated with the share, and the relative size of the placement. The last part of the analysis identifies an average underpricing of 2.29%, when comparing the share price 10 days after the private placement with the offer price. This finding is particularly interesting in the light of the equal treatment principle, outlined by the Norwegian security trading act. The fact that offers on average are underpriced, opens up for violations of the equal treatment principle, since private placement in some instances are offered only to a selected group of investors. However, the analysis presented in this thesis is unable to confirm the existence of unequal treatment, due to the lack of data regarding current shareholder participation in the studied private placements.