Factors Influencing Share Price Prior To an Initial Public Offer and Their Effect to Individual Investors: A Case Study of Nairobi Stock Exchange
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Date
2009-11
Authors
Journal Title
Journal ISSN
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Publisher
Kampala International University, bachelors degree in business administration
Abstract
The general objective of this study was to investigate and understand the factors that
influence share price manipulation prior to an IPO, effects of this to individual investors
and the subsequent effect to the Nairobi Stock Exchange.
The Researcher employed four research objectives this were Assessing how poor or lack
of information within the individual investors influenced the process of shares pricing,
Assessing how dysfunctional rules and regulations of the NSE and CMA were
influencing the valuation of shares prior to an IPO, Investigating whether the conflict of
interest within the major shareholders lead to the manipulation of share prices and
Assessing whether increased entry of new investors influenced the process of pricing
shares. To achieve these objectives the researcher sampled 80 respondents across some
brokerage firms (Suntra Investment Bank, CFC financial services, Faida Securities,
Ngenye Kariuki and Sterling Securities) that are associated with the NSE and CMA
which are the two regulatory bodies.
The major finding of the study was that dysfunctional rules in the CMA and NSE,
increased number of new entrants, poor or lack of information by the investors and a low
number of stock options are the factors influencing the activity of pricing of shares and
all these might eventually lead to investors shying away from the IPO's and thereafter
the collapse of the Nairobi Stock Exchange.
Description
A Dissertation Submitted To The School Of Business And Management in Partial Fulfillment Of The Requirements For The Award Of A Degree In Business Administration Of Kampala International University.
Keywords
Share Price Prior, Initial Public Offer, Individual Investors, Nairobi Stock Exchange