Seasoned equity issues in a closely held market: evidence from France

This paper examines seasoned equity offerings in France. Even though a rightsoffering is the primary flotation method, French companies are increasingly using therelatively expensive public offering method. We show that the market reaction to theannouncement of seasoned equity issues is significantly negative for rights issues andinsignificantly negative for public offerings. Our results suggest that the adverseselection effect is greater for rights issues than for public offerings, due to strongerunderwriter certification for the public offerings. We find that the share price effect ispositively related to blockholders take-up renouncements for firms with priorconcentrated ownership. For these firms, the favourable ownership dispersion effectoffsets the adverse selection effect.seasoned equity issues, flotation methods, ownership structure.

IPO Underpricing, Post-Listing Liquidity, and Information Asymmetry in the Secondary Market.

Using a ten-year sample of IPOs undertaken on Euronext with various mechanisms, our study examines the relationship between initial returns and post-listing liquidity, and tests whether it is influenced by ownership structure and information asymmetry. According to most of our findings, post-listing liquidity is positively related to initial underpricing, but we fail to prove that this relation is formed through ownership dispersion. It is more likely attributable to the interest underpriced stocks generate. Information asymmetry is negatively linked to the level of initial underpricing, suggesting that more public information is produced on more underpriced IPOs.IPO; information asymmetry; post-listing liquidity; initial underpricing; ownership structure;

Seasoned Equity Issues in a Closely Held Market: Evidence from France.

This paper examines seasoned equity offerings in France. Even though a rights offering is the primary flotation method, French companies are increasingly using the relatively expensive public offering method. We show that the market reaction to the announcement of seasoned equity issues is significantly negative for rights issues and insignificantly negative for public offerings. Our results suggest that the adverse selection effect is greater for rights issues than for public offerings, due to stronger underwriter certification for the public offerings. We find that the share price effect is positively related to blockholders take-up renouncements for firms with prior concentrated ownership. For these firms, the favourable ownership dispersion effect offsets the adverse selection effect.Corporate SEOs; Risk management; Rights offerings; Flotation methods; Ownership structure; Seasoned equity issues;

Centralised order books versus hybrid order books: a paired comparison of trading costs on NSC (Euronext Paris) and SETS (London Stock Exchange).

This article compares the cost of trading large capitalisation equities on the hybrid order-driven segment of the London Stock Exchange and the centralised electronic order book of Euronext. Using samples of stocks matched according to economic sector, free float capitalisation, and trading volume, our study shows that transaction costs are lower on the centralised order book than on the hybrid order book. The presence of dealers outside the electronic order book favours the frequency of large trades, but is associated with higher execution costs for all other trades and higher adverse selection and inventory costs inside the order book.Centralised market; Hybrid market; Order book; Transaction costs; Microstructure;

Centralised order books versus hybrid order books: a paired comparison of trading costs on NSC (Euronext Paris) and SETS (London Stock Exchange).

This article compares the cost of trading large capitalisation equities on the hybrid order-driven segment of the London Stock Exchange and the centralised electronic order book of Euronext. Using samples of stocks matched according to economic sector, free float capitalisation, and trading volume, our study shows that transaction costs are lower on the centralised order book than on the hybrid order book. The presence of dealers outside the electronic order book favours the frequency of large trades, but is associated with higher execution costs for all other trades and higher adverse selection and inventory costs inside the order book.Centralised markets; Fragmentation; Hybrid market; Order Books; Spread components; Transaction cost;

Why do Companies Include Warrants in Seasoned Equity Offerings: The case of French Unit Offerings.

We analyse the reasons why companies issue units when they raise additional capital. In contrast to previous evidence, our results show that units are not offered to mitigate the agency conflicts or to signal security mispricing as they are predominantly issued during cold periods, in public rather than in rights offerings, and when the issue is underwritten. In contrast, the results indicate that companies choose to offer units to circumvent the offer price regulation and to underprice their seasoned equity offering so as to minimise the issue cost and the risk of failure of the issue. These results provide support for the net proceeds maximization hypothesis.Warrants; Equity Issue; Flotation Method; Unit Offerings;

Les annonces de notations extrafinancières véhiculent-elles une information au marché?

(VF)Cet article analyse comment les investisseurs réagissent aux annonces de notations sociétales. Grâce à un échantillon d’annonces sur le marché français par Vigeo sur la période 2004-2009, nous mettons en évidence un impact globalement positif sur les rentabilités, qui dépend de la valeur du score et du domaine de notation. Sur les échanges, nous observons deux effets qui se compensent : une baisse des volumes de transaction avant, suivie d'une hausse après l'annonce.(VA)This paper examines how investors react to announcements of corporate social responsibility. From a sample of corporate social rating announcements by Vigeo on the French stock market during the 2004-2009 period, we find a significantly positive effect on stock returns, which depends on the score value and the field of notation. We observe compensating effects on trading volume: a decrease before the announcement followed by an increase afterwards.notation sociétale;performance sociétale et financière;ISR.corporate social responsibility rating;social and financial performance;SRI.

Frictions et asymétrie d’information sur les marchés d’actions

International audienceUn des objectifs principaux de la politique financière de l'entreprise est d'assurer le financement de ses activités aux meilleures conditions, c'est-à-dire de lever du capital au moindre coût. Elle a donc tout intérêt à conserver un actionnariat stable, ce qui devient difficile compte tenu de la globalisation et de l'informatisation des marchés financiers. Afin de se constituer une clientèle fidèle, l'entreprise doit choisir un mode de rémunération satisfaisant pour ses actionnaires, mais aussi gagner leur confiance par une meilleure communication. L'objectif de cet ouvrage est d'étudier les effets de la politique des entreprises en matière de rémunération du capital et de communication financière sur la situation et sur le comportement des actionnaires résultats présentés dans ce livre offrent des éléments de réponses pour les entreprises qui cherchent à fidéliser leur actionnariat et à élaborer une véritable stratégie de communication financière. Cet ouvrage s'adresse également à tous les étudiants soucieux d'approfondir leurs connaissances sur les marchés financiers