The effect of Disclosure accuracy in Prospectus on Security price in primary market: An Empirical Study on the Listed companies in Damascus Securities Exchange


Abstract in English

The purpose of this study, is to explain the factors that may be able to affect the prices of stocks in the IPO. So it could be priced at it's fair price, not less or more than it. Which caused by the existence of asymmetric information between the investors in the financial market. Whereas, the asymmetric information generates adverse selection with the investors, about the real values of the company and it's stocks in the IPO market. This research aims to study the multiple signals, which could be used by the firm to reduce the asymmetric information and highlight the real value of the firm and it's quality, in Damascus Securities Exchange between (2009-2011). Some of these signals, which has been considered in this research are: the standards of Financial and Non Financial disclosure in it's prospectus. The researcher reached to several results: The Financial disclosure standards has no relation to the stock price in the Syrian IPO market, and cannot be used as a signal to show the real value of the firm. On the other hand Non-Financial disclosure standards could be used as a good signal to show the real and fair price of the firms and their stocks in the IPO process. This result could help the financial market and the firms who want to go public to use this factors as a signal about it's quality, and for reduce the under pricing in their IPOs.

References used

BAGINSKI S. P., CONRAD E. J. and HASSELL J. M., 1993. The effects of management forecast precision on equity pricing and on the assessment of earnings uncertainty. The Accounting Review,VOL.68, NO.4 , PP:913-927
BARRON O.E., KILE C.O. and O’KEEFE T.B, MD&A Quality as a Measure by the SEC and Analysts’ Earnings Forecasts, Contemporary Accounting Research, VOL.16, No.1,1999, PP: 75–109
BEATTY R. P. and RITTER J. R., Investment Banking Reputation, and the Underpricing of Initial Public Offerings, Journal of Financial Economics, VOL.15, NO. 1/2, 1986, PP: 213 - 232

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