The performance of Moroccan IPOs: An analysis by event studies

Résumé

The purpose of this paper is to pool the various research and study the abnormal performance of IPOs, in particular, the phenomena of short-term undervaluation and long-term underperformance. Most of the contributions in this area have verified the existence of these phenomena on several stock markets particularly, Europe, USA and Japan which are markets with high maturity. However, there is almost a total absence of serious studies in sparsely populated markets like the case of Morocco. This paper will be started by drawing up the theoretical explanation of the abnormal performance. To move on to the debate on the literature on the methodology for calculating abnormal returns that we will use to verify and test the existence of these two phenomena. The last part will be devoted to the empirical study of the Moroccan case through several regressions applied to the Casablanca stock market. In this sense, our goal is to fill the gap and empirically verify these two phenomena and study the causes in the Moroccan case.

Keywords: Initial public offerings, abnormal returns, short-term undervaluation, long-term underperformance, Casablanca stock market

JEL Classification: G10, G14, G32, G40

Paper type: Empirical research