A comprehensive analysis of seasoned equity offerings in Thailand.

Abstract

This paper examines the comprehensive perspectives of Seasoned Equity Offerings (SEOs) in the Stock Exchange of Thailand during 1999–2014. Event study methodology is applied with this research to analyse the buy-and-hold abnormal return against the market. SEO in Thailand is perceived as a negative signal and lessens the stock performance vs. market average by -0.6% one day after the announcement, and drops down to -20.7% within the first year with the significant level of 1%. The magnitude of lower return keeps on increasing over five years. Investors react more proactively to the announcement rather than the actual issuance date. Right offering with common stocks gives the least negative abnormal return, follows by private placements, warrant offering and public offering, respectively. The firm that issues higher number of additional securities to the current ones has more negative abnormal return. Moreover, the higher the liquidity the firm is, the higher the return will be. The smaller firm, by means of market capitalization, tends to have better SEO performance. Most of the time during SEOs, individual investors are the net buyers, while foreign and institutional investors are the net sellers.