A descriptive analysis of IPOs post listing liquidity in Malaysia

Abstract

This study provides an overview of the issue of stock market liquidity among initial public offering (IPOs) by investigating the trend liquidity of IPOs for the period beginning 2002 through to 2017. Based on the Thompson Reuters DataStream database which provides data of Amihud's illiquidity measure (ILLIQ) for 304 IPOs Malaysian companies, detailed analysis shows that the corporate governance mechanisms plays an important role in increasing the transparency and disclosure of financial information, then reduces information asymmetries among market participants such as managers, large shareholders and investors, this leads increase stock market liquidity. The results of the study will be useful for firms through enables firms to know what factors are influence their stock market liquidity. Further, this study could have implications on regulating bodies such as Bursa Malaysia to help design regulations that could enhance stock market liquidity. Moreover, this study would provide implications for the investors and traders in terms of helping them on how to formulate their trading strategy.