Powerpoint slides of Group 2

Powerpoint slides of Group 2 - Accuracy of Forecast...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Accuracy of Forecast Information Disclosed in the IPO Prospectuses of Hong Kong Companies Presented by: Mr. Kenneth Wong no. 04711359G Mr. Kenneth Lau no. 04712830G   Ms. Amy Chan no. 04721482G Ms. Irene Lee no. 04719136G Mr. Kenji Chan no. 04710234G
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Agenda I. Introduction, Background & Objectives II. Literature Review III. Research Methodology and Data Collection IV. Result V. Conclusion & Recommendation Group’s Opinion
Image of page 2
I. Introduction Earning forecasts for Initial Public Offerings (IPO’s) provide: 1. Useful information for the expected future performance 2. In assisting the prospective investors to decide whether to subscribe to the offered shares. Earning forecast is becoming an important decision making tools for investors. However, there is no study has been conducted to evaluate the reliability of these IPO forecasts.
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
I. Background Given the capital market expansion increasing number of IPOs in Hong Kong; IPO forecast is voluntary in HK (except for 12 months cash flow forecasts); Forecast disclosed in prospectus carries important signal to public investors; Different studies in Hong Kong market in pricing aspect but no study focus on the forecast accuracy in IPOs;
Image of page 4
I. Background Almost all companies included forecast information in the IPO because……… Investors & sponsors would require the information to evaluate the expected future performance of these companies; It could induce prospective investors to make a positive investment decision; and It could influence the issue price of the offered shares because share price reflect companies’ future earning power.
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
To examine the accuracy of IPOs forecasts (profits, EPS & dividend) disclosed by Hong Kong companies; To examine whether these forecasts are under- or over-estimated; To examine its accuracy is influenced by other determinants: company-specific characteristics I. Objectives
Image of page 6
II. Literature Review: Accuracy & Characteristics of IPO Forecasts Country Disclosure Requirement Accuracy Time Horizon Company Age Company Size Leverage Company Auditor US Voluntary (rarely) N/A N/A N/A N/A N/A N/A UK Voluntary Accurate & Underestimate + ve N/A - ve N/A N/A Singapore Voluntary Accurate & Underestimate - ve N/A Insignificant N/A Insignificant Australia Voluntary Inaccurate & Overestimate - ve Insignificant Insignificant Insignificant Insignificant New Zealand Mandatory (1983) Inaccurate & Overestimate Insignificant - ve - ve Insignificant Insignificant - ve = negative association with forecast accuracy + ve = positive association with forecast accuracy
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
II. Literature Review Conclusions: Overall speaking, forecast accuracy differs from country to country. Time horizon of forecast is an important determinant. Company age has some influence on forecast accuracy.
Image of page 8
III. Research Methodology and Data Collection Forecast Error Metrics Forecast error is the difference between the predicted and actual figures for the same time period.
Image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern