%0 Journal Article
%T Theoretical Review of Effect of Firm Specific Factors on Performance of Initial Public Offering Stocks at the Nairobi Securities Exchange in Kenya
%A Anaclet Biket Okumu
%A Tobias Olweny
%A Willy Muturi
%J Open Journal of Business and Management
%P 327-352
%@ 2329-3292
%D 2021
%I Scientific Research Publishing
%R 10.4236/ojbm.2021.91018
%X <span style=\"font-family:Verdana;\">During the period 1994 to 20</span><span style=\"font-family:Verdana;\">20,</span><span style=\"font-family:Verdana;\"> a total of 1</span><span style=\"font-family:Verdana;\">8</span><span style=\"font-family:Verdana;\"> firms in
Kenya floated 1</span><span style=\"font-family:Verdana;\">6</span><span style=\"font-family:Verdana;\">,</span><span style=\"font-family:Verdana;\">530</span><span style=\"font-family:Verdana;\">,</span><span style=\"font-family:Verdana;\">7</span><span style=\"font-family:Verdana;\">81,060 shares at the Nairobi Securities Exchange
(NSE) under Initial Public Offerings (IPOs) raising </span><span style=\"font-family:Verdana;\">over</span><span style=\"font-family:Verdana;\"> Kshs </span><span style=\"font-family:Verdana;\">91
billion</span><span style=\"font-family:Verdana;\">. These stocks were significantly over-subscribed
with the highest hitting 830%.</span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">The NSE
became fully automated in 2006. Similarly, in Africa</span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">between 2010 and 2019 there were a total of 215 IPOs
raising over Kshs 1.6 trillion. This could be explained by divergence of
opinion hypothesis.</span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">The
initial returns were positive. However, in the long run, most of the firms
underperformed</span><span style=\"font-family:Verdana;\">.</span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">T</span><span style=\"font-family:Verdana;\">his under</span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">performance leads to losses
incurred by investors and possible collapse of brokerage and investment firms
leaving investors </span><span style=\"font-family:Verdana;\">with a bitter taste</span><span style=\"font-family:&quot;\"><span style=\"font-family:Verdana;\">. This study will undertake to establish the effects of firm specific
factors on IPO stock performance at the NSE in Kenya. The specific objectives
will be: to establish the effect of firm size on performance of IPO stocks at
the NSE in Kenya, to determine the effect of age of firm on performance of IPO
stocks at the NSE in Kenya, to evaluate the effect of firm board composition on
performance of IPO stocks at the NSE in Kenya, to establish the effect of firm
ownership structure on performance of IPO stocks at the NSE in Kenya, and to
analyze the moderating effect
%K Initial Public Offerings (IPOs)
%K Performance
%K Automation
%K Firm Specific Factors
%K Nairobi Securities Exchange
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=106876