An empirical study of the IPOS in Singapore : an accounting ratio approach
Mah, Catherine Siok Hean
Tan, Kien Koon
Date of Issue1994
College of Business (Nanyang Business School)
We examined the pre-listing and the post-listing performance of 24 companies which were listed on the Stock Exchange of Singapore Main Board and SESDAQ in the period 1983 to 1987. We used the financial ratios of these companies in determining their performance in terms of profitability, liquidity and capital structure. The results do not provide concrete evidence of any improvement in the profitability of these companies. It does however indicate an improvement in the business overall in that there is an increase in turnover and greater efficiency in the deployment of fixed assets. Overall, there appears to be significant improvements in the fundamental position of the companies, as evidenced by the improvement shown in both the liquidity and capital structure positions of the companies after listing. We found that market adjustment to the data in this study did not have significant impact on the results. Except for one ratio, the fixed asset turnover, all other ratios which were originally significant at the 5 per cent level remained within the 10 per cent level of significance irregardless of whether market medians were introduced to adjust these ratios.
Nanyang Technological University