Economic Themes (2020) 58 (1) 6, 97-115
Aleksandra Pešterac
Abstract: The first issue of shares is the key moment in the life cycle of any company that was not previously listed on a stock exchange. Considering the fact that transformation into a public open joint stock company brings along a number of advantages and challenges, it would be of great importance to possess knowledge about initial public offering (IPO) issuing activity, as well as stay updated with the number and value of globally realised IPOs. The aim of the paper is to use the comprehensive analysis of IPOs realisation process in order to point out the importance of going public, having in mind both the corporations and investors in the capital market, as well as the economy as a whole. In accordance with the set goal, the paper will present the effects of the realised IPO processes in the countries of Western Europe, China, Japan and the USA. When it comes to developing countries, the IPO of shares on a stock exchange is of special importance, since it contributes to the further development of capital market. Due to the particularity of the Serbian macroeconomic environment, the trends of privatisation process, the insufficient protection of investors, the high level of information asymmetry and the lack of corporate education, there have been no IPO processes realised on the Belgrade Stock Exchange over the past eight decades.
Keywords: initial public offering (IPO); going public; capital market; underpricing; information asymmetry; stock exchange
THE IMPORTANCE OF INITIAL PUBLIC OFFERING FOR CAPITAL MARKET DEVELOPMENT IN DEVELOPING COUNTRIES
Aleksandra Pešterac
Abstract: The first issue of shares is the key moment in the life cycle of any company that was not previously listed on a stock exchange. Considering the fact that transformation into a public open joint stock company brings along a number of advantages and challenges, it would be of great importance to possess knowledge about initial public offering (IPO) issuing activity, as well as stay updated with the number and value of globally realised IPOs. The aim of the paper is to use the comprehensive analysis of IPOs realisation process in order to point out the importance of going public, having in mind both the corporations and investors in the capital market, as well as the economy as a whole. In accordance with the set goal, the paper will present the effects of the realised IPO processes in the countries of Western Europe, China, Japan and the USA. When it comes to developing countries, the IPO of shares on a stock exchange is of special importance, since it contributes to the further development of capital market. Due to the particularity of the Serbian macroeconomic environment, the trends of privatisation process, the insufficient protection of investors, the high level of information asymmetry and the lack of corporate education, there have been no IPO processes realised on the Belgrade Stock Exchange over the past eight decades.
Keywords: initial public offering (IPO); going public; capital market; underpricing; information asymmetry; stock exchange
