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Ipo Market Companies
Introduction
The report analyzes the performance of 30 non-financial IPO’s, floated in the Alternative investment market (AIM) during the period of Jan 2002- Dec 2004, the main tasks undertaken were First, to define a portfolio of 30 IPO’s that were floated in the given time period. Second, calculating the initial returns of the selected IPO’s and testing them. Third, deriving a 24 month return of the same securities and thereafter testing those returns, in both the circumstances (second & third) the return is tested by deriving the basic descriptive statistics (mean, standard deviation etc.) on the data collected and hence discussing and commenting on the same
The sample of IPO’s that our group has selected is basically refined from Jan 2002 - Dec 2003. The criteria taken into consideration while selecting the IPO’s was to make a portfolio that would cover different sectors of the market, basically diversifying and defining the movements of these securities in the AIM market more precisely; the sample is divided into 4 major industrial sectors
Pharmaceuticals & biotechnology.
Mining.
General finance.
Software & computer services
The IPO’s that we have selected were floated in the market either by placing or by an open offer. The table given below shows the name of the companies that our group has selected with a detailed synopsis of the companies selected, illustrating the data on the Initial Public Offerings. (Date of issue, market capitalization, issue price etc.)

Computing the initial return of the IPO’s

For computing the initial return of the IPO’s we have taken into account the issue price of the securities and the price after 12 months from the issue also bearing in mind if any dividend is paid out during this period. The initial return formula that we have used has 3 variables which can be solved for;
Initial Return = (P1 – P0) +div
P0
Where,
P0 = Issue Price.
P1 = Price after 12 months.
Div = Dividend paid during this period.
We can see that for the 12 month period considered, the pharmaceutical & the biotechnology sector is showing a bearish trend giving negative returns with DDD Group with the lowest at -86.69%, the gold mining and the other minerals extracting sector is giving a positive return during this period of 12 months, with African Eagle Resources showing the maximum positive return of 283% in one year, the performance of the general finance sector is bullish with almost all the companies giving a positive return. Also observed is that most of the companies in the portfolio have not declared any dividends after there first financial year, therefore in most of the cases dividend paid out is taken.

The issue price for Caledon Resources Plc & Healthcare Enterprise Group could not be found out therefore it was not possible to calculate there initial returns. For all the other stocks refer to Table .01 and the histogram (fig. 01) displaying the returns. For an extensive reference and guidance to how the returns were calculated refer to Appendix 02 (returns).

Testing the initial return
For testing the return, we have used some basic descriptive statistical tools such as;
Mean: The mean is the "standard" ave本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。