The comparative analysis cross-sectoral price performance of ıpos in Turkey

The purpose of this study is to determine the level of underpricing of IPOs, to examine short and long-run price performances according to the Cumulative Abnormal Return and Buy and Hold Return methods and to analyze the variables affecting these performances of IPOs that have taken place in Turkey in the period of January 1994-December 2009.Obtained results demonstrate that underpricing level of IPOs taken place in Turkey is high and investors provide return over the market in first day trading. According to the sectors, manufacturing industry sector has been determined as sector investors are obtained highest initial abnormal return in first trading day. The sectors that provide further advantage to investors in short-run is other organisations sector according to the CAR method and manufacturing industry sector and financial institutions sector according to the BHR method. The sector obtained lowest return in short-term is education, health and other social services sector according to the both methods. IPOs providing return over the market to investors in first trading day have shown high performance according to the CAR method, low performance according to the BHR method in the long run. According to CAR method, while highest return has been obtained in wholesale and retail trade, hotels and restaurants sector, lowest return has been obtained in manufacturing industry sector in the long run. According to BHR method, while financial institutions sector has been obtained the highest return, technology sector has been obtained the lowest return in the long run. It?s determined that variables affecting the initial return on IPOs are sales method, age of the firm, the number of underwriters, the standard deviation. While variables affecting the short run price performance on IPOs are determined as the number of underwriters, the standard deviation, market return, total assets and initial return, variables affecting the long run price performance on IPOs are determined as proceeds from initial public offerings, relations between underwriters and issuer, the standard deviation and industry classification of financial institutions.Key Words: İnitial Public Offering, Underpricing, Price Performance, Stock Return.