Credible Underwriter- Analyst Recommendations: Scandinavian Evidence

• Excess returns for Scandinavian IPO-firm recommendations from underwriter analysts for 1996-2001, in a market without the "quiet- period" regulation, were compared to those from non-underwriter analysts. Underwriter-analyst recommendations were found to outperform non-underwriter-analyst recommendations during the first year after publication, yielding substantially higher mean excess returns. Recommendations from underwriters came sooner after the IPO date and performed better than the market before, and worse in the days surrounding the recommendation date, showing no evidence that underwriters tried to "boost" IPO firms in the aftermarket trading. The results support the superior-information hypothesis.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

Initial public offerings; Quiet period; Stock recommendations; Underwriter analysts

Publication and Content Type

vet (subject category)

rap (subject category)