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Business, Economics, Finance and Accounting100%

Selected Abstracts

Going Public: An Empirical Investigation of U.S. Bound Israeli IPOs

FINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 3 2010
Iftekhar Hasan
Between 1985,2003, more than 120 Israeli companies went public in the U.S., bringing the accumulated number of U.S. bound, Israeli initial public offerings (IPOs) to a figure greater than all other foreign countries combined. In this study, we compare the short and long run performance of Israeli IPOs to that of similar international and U.S. IPOs. Holding all else equal, we find that Israeli IPOs are significantly less underpriced than their local and foreign counterparts. As we examine the characteristics of Israeli issuers, we find that they differ than those of other foreign and local issuers in some important dimensions that compensate investors for information asymmetry and risk. First, compared to their home market capitalization size, U.S. bound Israeli IPOs, are significantly larger than the IPOs conducted by their foreign counterparts. Second, Israeli issuers tend to perform better than other foreign and U.S. local IPOs during our entire period of observation. Third, to a large extent, the Israeli firms in our sample have products, licensing or franchising relationships or venture capital funds with strong roots in the U.S. prior to the IPO. And fourth, the relevant investor community of Israeli IPOs, at least at the early stages, is small and overwhelmingly American. Our findings are consistent with prior studies documenting that firms raising capital outside of their domicile country are typically a select group of high quality firms in need of external financing that cannot be sufficiently provided in their home market. [source]

Is the Corporate Loan Market Globally Integrated?

THE JOURNAL OF FINANCE, Issue 6 2007
A Pricing Puzzle
ABSTRACT We offer evidence that interest rate spreads on syndicated loans to corporate borrowers are economically significantly smaller in Europe than in the United States, other things equal. Differences in borrower, loan, and lender characteristics do not appear to explain this phenomenon. Borrowers overwhelmingly issue in their natural home market and bank portfolios display home bias. This may explain why pricing discrepancies are not competed away, though their causes remain a puzzle. Thus, important determinants of loan origination market outcomes remain to be identified, home bias appears to be material for pricing, and corporate financing costs differ across Europe and the United States. [source]

The contribution of a satellite market to price discovery: Evidence from the Singapore exchange

THE JOURNAL OF FUTURES MARKETS, Issue 10 2004
Vicentiu Covrig
The Singapore Exchange (SGX), a small satellite market, successfully competes with a large home market, the Osaka Securities Exchange (OSE), in trading the Nikkei 225 futures index. In this paper, we investigate the contribution of the SGX to price discovery and shed light on the reasons for its continued success. Evidence is provided from information revelation and price discovery of three competing but informationally linked markets of the Nikkei 225 index,domestic spot (Tokyo Stock Exchange), domestic futures (OSE), and foreign futures (SGX), which represents the satellite market. Overall, the futures market contributes 77% to price discovery, with the satellite market contributing 42% of the futures and 33% of the total price discovery. These figures, surprisingly, far exceed the satellite market's share of trading volume. Support is provided for the extended trading hours on the SGX for three of the four non-overlapping trading sub-periods. © 2004 Wiley Periodicals, Inc. Jrl Fut Mark 24:981,1004, 2004 [source]

Middle East and North Africa take growing share of EU's gas market

OIL AND ENERGY TRENDS, Issue 8 2007
Article first published online: 13 AUG 200
The Middle East and North Africa are becoming an increasingly important source of supply for the European Union (EU). The 25 member-states now import some 17% of all the gas they consume from this region. A decade ago, its share was only 9%. This is perhaps not too surprising given the Middle Eastern and North African share of global gas reserves. It is likely moreover that the EU will seek even more of its gas from this source, despite the fears of some energy planners that Europe is already too dependent on what they regard as a politically unstable region. An even bigger worry, however, might be that Middle East and North Africa may not have sufficient gas to meet the increased needs of both the EU and their own home markets, as the latest study by OET's Global Energy Review suggests (see 'Middle Eastern Gas: An under-used Resource?' at http://oilandenergytrends.com). [source]