Datasonic: Going Public

At 8.00 am on January 6, 2012, the Chief Operating Officer (COO) of Datasonic was entering his office which was located at its headquarters in Kuala Lumpur.Raymond, the COO,began looking at all the documents that were placed on his table. All these papers have to be scrutinized and a report prepared before the historic culmination of a new journey. Although Raymond was already exhausted thinking about the numerous events leading to the new chapter of the company, he was adamant about forging ahead. His company was on the verge of pursuing an initial public offering (IPO) and was about to experience a big and important change soon.Just as he was thinking even further, the telephone on his table rang.In fact, the telephone in his office had been ringing incessantly over the past few days.There was an urgency hanging in the air as the telephone rang today. It appears as if Raymond would be unable to reject any calls at all today for it rang so clearly, so loudly and so importantly.As Raymond picked up the mouth piece to speak, he could hear a familiar voice, that of the founder of Datasonic, Datuk Abu Hanifah, who was on the other end

Growth opportunity and IPO value: An empirical study of Malaysian IPOs

The offer price of Malaysian initial public offerings (IPOs) is mostly determined by fixed-price mechanism, indicating that information for investors regarding the actual value of an IPO is not being fully reflected in the offer price. The investors’ opinion in fact triggers IPO value on the first trading day in the market. This study aims to investigate the effect of growth opportunity on the pricing of Malaysian IPOs upon being listed on Bursa Malaysia. The sample of the study consists of 126 IPOs listed from January 2009 to December 2017. Through the analysis of cross-sectional and quantile regression in median and high quantiles, the study found a significant positive relationship between growth opportunity and total market value of IPOs. The findings suggest that IPOs which allocate a greater proportion of proceeds for firms’ future growth signal the firms’ quality, leading investors to trigger IPO value upwards during first-trading day. The findings have implications for the regulators, specifically the Securities Commission and Bursa Malaysia, to ensure that the information on the uses of proceeds revealed in IPO prospectuses is in line with the “Equity Guidelines” because this information gives impact on the investors’ decisions towards IPO subscription

Leverage and IPO pricing: Evidence from Malaysia

Purpose – The purpose of this study is to examine the influence of underwriter reputation on the valuation of Malaysian initial public offerings (IPOs). Design/methodology/approach – This study employed cross-sectional multiple regression models to analyse the relationship between underwriter reputation and IPO valuation that included 466 IPOs listed on Bursa Malaysia from 2000 to 2017. Findings – The results revealed that underwriter reputation had a significant negative association with IPO valuation. Firms that engaged the services of reputable underwriters had their IPO offer prices set lower than the intrinsic values during the listing. After incorporating firms’ size, this study found a positive relationship between underwriter reputation and IPO valuation. Big firms (high quality) hired reputable underwriters for certification purposes as issuers were aware that the cost of hiring a reputable underwriter would be justified by increased transparency after listing. Therefore, firms that engaged reputable underwriters had approximately fair values since issuers assumed that the price would be close to the intrinsic value following enhanced transparency post-listing. Research limitations/implications – Future studies should focus on other non-financial factors, such as auditor reputation. Originality/value – The present study provides new insights into the certification role of underwriters in valuing IPOs in the Malaysian market

Do institutional investors drive the IPO valuation?

This study aimed to investigate the effect of institutional ownership on initial public offering (IPO) valuation and also to examine the indirect role played by the pricing mechanism on the relationship. Cross-sectional multiple regression was used to analyse the relationship between institutional ownership and IPO valuation based on the sample of 450 IPOs listed on Bursa Malaysia between January 2000 and December 2018. The results show that institutional ownership had a positive association with IPO valuation. The signalling role of institutional investors attempted to convey information on firms' qualities which in turn had approximately fair IPO valuations. Further, this study found that book-built IPOs with higher institutional ownership were priced more closely to the firms' intrinsic values. The results have implications for underwriters and issuers in signalling firms’ qualities through incorporating book-building in IPOs and allocating a higher number of shares to institutional investors

Underwriter reputation and IPO valuation in an emerging market: evidence from Malaysia

Purpose – The purpose of this study is to examine the influence of underwriter reputation on the valuation of Malaysian initial public offerings (IPOs). Design/methodology/approach – This study employed cross-sectional multiple regression models to analyse the relationship between underwriter reputation and IPO valuation that included 466 IPOs listed on Bursa Malaysia from 2000 to 2017. Findings – The results revealed that underwriter reputation had a significant negative association with IPO valuation. Firms that engaged the services of reputable underwriters had their IPO offer prices set lower than the intrinsic values during the listing. After incorporating firms’ size, this study found a positive relationship between underwriter reputation and IPO valuation. Big firms (high quality) hired reputable underwriters for certification purposes as issuers were aware that the cost of hiring a reputable underwriter would be justified by increased transparency after listing. Therefore, firms that engaged reputable underwriters had approximately fair values since issuers assumed that the price would be close to the intrinsic value following enhanced transparency post-listing. Research limitations/implications – Future studies should focus on other non-financial factors, such as auditor reputation. Originality/value – The present study provides new insights into the certification role of underwriters in valuing IPOs in the Malaysian market

The influence of lock-up provisions on IPO initial returns: Evidence from an emerging market

A lock-up agreement ensures that major shareholders retain significant economic interest in the companies following the IPOs. Rationally, these insiders will not adhere to the lock-up agreement unless the benefits of doing so can more than offset the costs. Therefore, in an environment characterized by high information asymmetry, a lock-up agreement can serve as an effective mechanism to signal the risk or quality of firms. This article examines whether the lock-up ratio and lock-up period affect the initial returns, using a sample of 384 IPOs listed on Bursa Malaysia between 2000 and 2012. The results of the cross-sectional multiple regression show that the lock-up period is significantly positive in explaining IPO initial returns, but the lock-up ratio is not. The findings provide new insights for testing the signaling content of lock-up provisions, particularly in a setting characterized by high information asymmetry

Does prospectus information matter in IPO pricing?

Purpose – The purpose of this study is to identify selected information from the prospectus that might signal the initial public offering (IPO) offer price. Design/methodology/approach – This study uses cross-sectional data for a 14-year period from 2000 to 2014 in examining hypotheses relating to Shariah-compliant status, institutional investors, underwriter ranking and shareholder retention, with respect to their associations with the offer price of the IPOs. Further, this study uses ordinary least squares (OLS) for all models, including the models for both subsamples of Shariah- and non-Shariah-compliant IPOs. As for robustness, this study incorporates the quantile regression and quadratic model. Findings – The results tend to provide support for the argument that firms with Shariah-compliant status reflect lower uncertainty and project better signalling of quality due to greater scrutiny by the government and thus are able to offer IPOs at higher prices. Similarly, firms with a higher proportion of shareholder retention indicate lower risks as insiders forego their options to diversify their portfolio, and hence could price their IPOs higher. Finally, the involvement of institutional investors and higher underwriter ranking could be used by firms to disregard information asymmetry, and therefore, the issuer might have to discount the IPO offer price. Research limitations/implications – This study focuses solely on information in the prospectus that should not be disregarded by the investors in valuing the appropriateness of the IPO offer price. This study contributes in terms of providing a better understanding of the determinant factors of the IPO offer price of the firms which are Shariah-compliant. Originality/value – This paper provides evidence for the determinants of the IPO offer price in a fixed pricing mechanism for both Shariah-and non-Shariah-compliant IPOs

The Role of Service Quality, Involvement and Customer Satisfaction in Green Hotel Industry: Assessment of Structural Model and IPMA Analysis

This study proposed the linkages between service quality, involvement and customer satisfaction towards green hotel industry. This study employed a cross-sectional study design by using a set of questionnaires as the instruments for measuring the targeted constructs. An empirical assessment of the theoretical framework for this study included a survey of 317 certified green hotel guests in Malaysia. The resulting data were analyzed using the PLS-SEM and IPMA analyses using the SmartPLS 3.0 software. The findings suggested that service quality, and involvement has a positive significant impact towards customer satisfaction. Besides that, service quality was also having a positive significant impact toward involvement. In addition, involvement gives a partial mediating effect toward the relationship of service quality and customer satisfaction by testing the indirect effect. The analysis also supported by the IPMA analysis, where service quality plays a vital role to increase customer satisfaction as compare to the role of involvement. Thus, this study contributed to service quality and marketing literature by adding new empirical evidence on the direct and indirect relationship between service quality, involvement and customer satisfaction

The Development of the Malay Garden Concept

This study discusses the development of the Malay garden concept using the old Malay manuscripts and site observation to the Malay villages along Peninsular Malaysia. The inherited landscape design concept can offer as a guideline to conserve the integrity and the authenticity of the traditional Malay garden design and the strength of these characters will extensively use in developing the concept of landscape design in Malaysia due to the increasing awareness of design and the quality of life. Keywords: Malay Garden, Malay Landscape, Cultural Landscape, Quality of Life eISSN 2398-4279 © 2018. The Authors. Published for AMER ABRA cE-Bs by e-International Publishing House, Ltd., UK. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer–review under responsibility of AMER (Association of Malaysian Environment-Behaviour Researchers), ABRA (Association of Behavioural Researchers on Asians) and cE-Bs (Centre for Environment-Behaviour Studies), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia