The Effects of Analyst Recommendations on IPO Performance Surrounding Lockup Expiration: Evidence from the Malaysian Market

Abstract

This study investigates whether there is a difference in IPO returns between those with positive analyst recommendations and those without, surrounding the expiration of the lockup period. The sample of IPOs was taken from Bursa Malaysia’s Main Board and ACE Market from 2000 to 2014. The research uses a comparative mean analysis to identify differences between IPOs with analysts’ positive recommendation and without analysts’ positive recommendation. Comparative mean analyses include independent and paired t-tests, are conducted to evaluate performance differences between IPOs with positive analyst coverage and those without. The results reveal no statistically significant difference in abnormal returns between the two groups across the pre-event, event date, and post-event periods. The findings suggest that Malaysian market participants do not treat positive analyst recommendations as a decisive trading signal during the lockup expiration period.