IPO Price Support and Its Determinants in Indonesia

CHRISTOPHER ALVIN S, Dr. Jan Lemmen

2019 | Skripsi | S1 MANAJEMEN

This paper aims to identify the determinants of initial public offering (IPO) price support in Indonesia and its implications for the period of January 2008 until December 2018. To study the pattern of price support activity, this study starts by testing several algorithms to identify the supported IPOs. Possible determinants of price support, are based on existing studies. The result suggests that weak IPOs are more likely to be supported by overselling the initial shares which will be covered after the IPO starts trading. In addition, price support is more likely for IPOs with higher initial price risk, but price support may reduce this risk in the aftermarket.

This paper aims to identify the determinants of initial public offering (IPO) price support in Indonesia and its implications for the period of January 2008 until December 2018. To study the pattern of price support activity, this study starts by testing several algorithms to identify the supported IPOs. Possible determinants of price support, are based on existing studies. The result suggests that weak IPOs are more likely to be supported by overselling the initial shares which will be covered after the IPO starts trading. In addition, price support is more likely for IPOs with higher initial price risk, but price support may reduce this risk in the aftermarket.

Kata Kunci : Indonesian Stock Market, IPO pricing, IPO price support, investor�s demand