Determinants of the underpricing of new shares during the subscription period: empirical evidence from the Spanish stock exchange

• Consuelo Riaño Gil ^[1] ; Francisco Javier Ruiz Cabestre ^[1] ; Rafael Santamaría Aquilué ^[2]
  1. [1] Universidad de La Rioja

     Universidad de La Rioja

     Logroño, España

     
  2. [2] Universidad Pública de Navarra

     Universidad Pública de Navarra

     Pamplona, España

     
• Localización: Applied financial economics, ISSN 0960-3107, Vol. 17, Nº. 7-9, 2007, págs. 521-540
• Idioma: inglés
• DOI: 10.1080/09603100600706725
• Texto completo no disponible (Saber más ...)
• Dialnet Métricas: 1 Cita
• Resumen

  • This article reports on an issue hitherto unexplored in the literature, namely, the 'new shares' price setting during the subscription period. We report evidence of a spread between the old stock price and the value of new shares obtained through subscription. A framework is developed within which to analyse the explanatory factors involved in this spread in the Spanish Stock Exchange. The empirical evidence suggests that new share prices during the subscription period are influenced by a range of factors, such as difference in the amount of tax to which subscription rights and capital gains are subject, characteristics of the issuer and the issue, norms established between clients and banks and the microstructure of the subscription rights market.