Post-Issue Performance of Mongolian IPOs

Abstract

Mongolian stock market is a very young, fast-developing frontier market. Foreign investor interest on Mongolian mining companies has triggered a number of interesting IPOs in Mongolian stock market in recent years. This paper has investigated the short-term and long-term stock price performance of the Mongolian IPOs during the period of 2005-2012 to assess the post-issue performance of the Mongolian IPOs and compare it to benchmarks in world's developed and emerging or frontier markets. The BHAR method was used to estimate the benchmark-adjusted returns for the IPO stocks during the period. It has been found that the Mongolian IPOs are underpriced in the short run but underperform the market in the long run.