The pricing of property trust IPOs in Australia

Following Brounen and Eichholtz (2002) this paper adds to the international literature investigating the underpricing of REIT initial public offerings (IPOs), with a study into Australian property trusts. This study finds that initial day returns can in part be explained by forecast profit distributions (or dividends) and the market sentiment towards property trusts from the date of the prospectus to the date of listing. There is some support for the “winners curse” explanation of underpricing with evidence that large investor or institutional involvement at the outset of the IPO also has some explanatory power.

The costs of raising equity capital by Australian property trust initial public offerings

This paper reports some of the direct costs of raising equity capital by property trust initial public offerings (IPOs) in Australia from 1994 to 2004. It also documents the amount of underpricing by these IPOs. The results indicate the average fees paid to underwriters and/or stockbrokers in managing and marketing the issue was around 3.3% of the public equity capital raised. The average fees paid to legal firms, accounting firms and valuers for their professional involvement and expert reports were 0.4%, 0.2% and 0.1% respectively, totaling 0.7% of the equity raised. Other fees such as printing, listing fees, postage, distribution and advertising cost around 2.1%. The total average direct costs amounted to around 6.1% of the proceeds raised. The average underpricing by these property trust IPOs was 2.6%. This paper also investigates the hypotheses that the percentage direct capital raising costs are influenced by the size of the IPO and whether the IPO is underwritten. This study confirms that larger property trust equity capital raisings have lower percentage total direct cost;, however, it does not find that underwriting significantly influences the percentage of total direct costs for these property trust IPOs.

Intangible assets and the underpricing of industrial company initial public offerings

This study analyses 262 industrial company initial public offerings (IPOs) in Australia from 1994 to 1999. It finds that the identification and valuation of brand name, trademark, patent and capitalized research and development cost intangible assets in the prospectus significantly reduces underpricing. The identification of goodwill and license cost intangibles does not appear to be significant to underpricing. This paper supports the Beatty and Ritter (1986) argument that IPOs may display financial and nonfinancial characteristics that lower the uncertainty about the value of the lPO and hence lower the underpricing of that IPO. Our findings suggest implications for the issuer who wants to maximize the value of the firm at the time of the lPO, the underwriter who is required to guarantee the success of the capital raising and for the initial investors who are looking to reduce their uncertainty about the valuation of the lPO.

Fabrication of novel TiZr alloy foams for biomedical applications

Bone injuries and failures often require the inception of implant biomaterial. Research in this area has received increasing attention recently. In particular, porous metals are attractive due to its unique physical, mechanical, and new bone tissue ingrowth properties. In the present study, TiZr alloy powders were prepared using mechanical alloying. Novel TiZr alloy foams with relative densities of approximately 0.3 were fabricated by a powder metallurgical process. The TiZr alloy foams displayed an interconnected porous structure resembling bone and the pore size ranged from 200 to 500 μm. The compressive plateau stress and the Young’s modulus of the TiZr foam were 78.4 MPa and 15.3 GPa, respectively. Both the porous structure and the mechanical properties of the TiZr foam were very close to those of natural bone.

Knowledge mediation in software quality engineering

The risk of failure of the software development process remains high despite many attempts to improve the quality of software engineering. Contemporary approaches to process assurance, such as the capability maturity model have not prevented systemic failures, nor have project management methodologies provided guarantees of software quality. The paper proposes an approach to software quality assurance based on a knowledge mediated concurrent audit, which incorporates essential feedback processes. Through a tightly integrated approach to quality audit, programmers would be empowered to use any chosen methodology to advantage, supported by intelligent monitoring of the essential interactions which occur in the development process. An experimental application implementing some aspects of the proposal is described

More than just a transaction: conceptualising industry-based networks for virtual trading communities

This paper addresses the questions of why failure in industry-based networks has been so persistent and whether it is possible to avoid failure and achieve success in internet based markets [iMarketplaces]. A better explanation of implementation failures is important for both improved empirical outcomes and theory building. We construct a theoretical framework based on Bijker’s technology frame (1995) and a contextualization typology developed by Nowotny, Scott and Gibbons (2001). The framework helps us understand how industry-based networks function, why they fail and how we can apply the framework to assist better empirical outcomes. In this paper we apply our framework to Food Connect Australia, a vertically integrated marketplace, representative of the first wave of B2B markets. Sponsors of these iMarketplaces were quick to see and exploit the opportunities online access offered to bring together large numbers of buyers and sellers in new ways. However a lack of understanding of firstly, what represented true value in these networks and secondly, how to achieve buy-in at sustainable levels, meant that many of these first wave sites failed. Application of our framework reveals why there has been a radical shift from the trading role originally envisioned for these sites to the information hub model of the iMarketplace that industry is now being urged to adopt (Berryman and Heck, 2001).

Corporate governance developments in commonwealth countries

Corporate failures, fraud and rising salaries have directed attention towards the corporate governance mechanisms of companies. A review of governance developments in selected Commonwealth countries is undertaken in order to inform the governance debate and provide an opportunity to discuss governance relating to some countries which may not receive much attention in the debate. The countries covered in this review are the United Kingdom, South Africa, India and Australia. Brief coverage of the respective countries' progressions in the corporate governance debate is provided.

Institutional economics approach to irrigation management with special reference to developing countries

Neoclassical economics has failed to address irrigation management issues in developing countries successfully. Institutions are at the heart some of these failures. Many academics in various disciplines in the social sciences now emphasize the need to pay attention to the multitude of informal institutions such as rotational irrigation in developing countries and not to treat them as irrelevant for development. Water user associations have been initiated for irrigation management in many countries. These have shown much promise although many problems still constrain the full adoption of this institutional mode. Water pricing is still at its infancy and significant problems remain in the use of the market system for improved management of irrigation water.

Conflicts of interest and china's A-Share underpricing

The extremely high A- share underpricing in China's primary market provides us with a very interesting area of empirical research. Previous studies on China's IPO underpricing have been suggestive, but in-conclusive. We investigate the A- share underpricing by employing the most recent data available. A significant decline in A- share underpricing is found in 2003 relative to previous years (and much less than that recorded in the literature to date). We examine the validity of previous A- share underpricing models, reported in the literature, and find a statistically significant structural break in the data during 2003 when these models are specified. We further explore conflicts of interest in the Chinese IPO market and specify an alternative class of models to further examine this change in observed market behaviour. Our results suggest that a contract with high underwriter's fee leads to less A- share underpricing. Our results also suggest that the asymmetric information hypothesis does not apply in the Chinese !PO market in 2003. Overpricing by the secondary market and the trading activity on the first trading day are the main functions of the A- share underpricing. This study has important implications such as guiding the Chinese government policy regarding the regulations of Initial Public Offering.

Impetus to explore: approaching operational deficiency optimistically

‘Impetus to explore’ is studied through post-lesson video-stimulated student interviews. This impetus focuses ‘spontaneous’ decisions to explore unfamiliar mathematics. Uncertainty, quests for elegance and curiosity have been found to contribute to this impetus. This study identified other contributing factors: inability to undertake the teacher’s task, ‘optimistic explanatory style’ (Seligman, 1995), and identifying relevant complexities (Williams, 2002). Explanatory style affects how a person perceives successes and failures. Enactment of optimism in this study illuminated its role in creating an impetus to explore. Re-conceptualising ‘operational deficiency’ (Chen & Siegler, 2000) to include absence of resources to undertake a task illuminated a task design feature that can increase exploration.

Auditor selection : what influences decisions by listed companies?

Major business failures, including Enron and WorldCom in the United States and Harris Scarfe and HIH in Australia, and related alleged audit failures, have put the choice of auditor on the agenda. The choice of the right auditor has economic consequences for an auditee and implications for corporate governance. Factors important to explaining auditor choice are discussed, including institutional factors (pertaining to the auditee and auditor) and newer emerging criteria as well as networking between directors and auditors. Relevant research and the policy implications for good corporate governance of auditor choice in publicly listed companies are explored.

Towards a new policy environment for indigenous people, culture and knowledge in Australian higher education: an examination of issues and possibilities for institutional and government policy

The purpose of this discussion paper is to stimulate an examination of critical issues in Indigenous higher education and encourage new possibilities to be explored. It invites a wide sharing of views. The paper
does not attempt to trace the full history of the policies for Indigenous higher education and the successes and failures. The focus instead is on the major contemporary issues and the key questions that might be considered by the conference participants.

An exploration of relational customers` response to service failure

Purpose – The purpose of this paper is to examine how customers with different relational bonds respond to the same service failure. In particular, the framework to service failure and recovery devised by Fournier and Mick is applied.
Design/methodology/approach – To uncover rich emotional and cognitive responses to service failure, in-depth interviews with eight former and current patrons of an Australian opera were used.
Findings – Three types of relationship were identified: satisfaction-as-love (SaL), satisfaction-as-trust (SaT) and satisfaction-as-control (SaC). Each responded to the same failure in different ways. SaL customers had emotional bonds with the product category and thus reaffiremed their loyalty following the failure. SaT customers saw the service failure and inadequate recovery as a breach of the brand's implied promise and thus excited the relationship. SaC customers took charge of the situation, using their status to improve their situation and then defended the brand.
Practical implications – The findings indicate the importance of customizing service recovery strategies, in this case to those customers with the strongest emotional bonds to the brand, not the product class.
Originality/value – This is the first paper to examine how relational customers respond to service failure and identify how different customer-brand relationships result in different post-failure reactions and expectations of service recovery.

Factors influencing the direct costs of property trust IPOs

Underwriting, legal, accounting and valuation costs average around 3.3%, 0.39%, 0.23% and 0.12% of proceeds raised and are substantial costs to property trust initial public offering (IPO) issuers. As such, identifYing factors that influence these costs is important. This paper investigates factors influencing these costs as well as the total direct costs of raising equity capital by property trust IPOs in Australia from 1994 to 2004. The results suggest clear economies of scale in direct costs. In addition, IPOs that employ more debt are likely to have higher capital raising costs while those that have proportionally higher net asset values and offer stapled securities (and likely to be engaged in property development activities) have lower capital raising costs.

The costs of raising equity capital for closed-end fund IPOs

This article reports on some of the direct costs of raising equity capital by closed-end fund licensed investment company (LIC) initial public offerings (IPOs) in Australia from 1995 to 2005. The amount of underpricing by these IPOs is also identified. The average total direct costs amounted to a relatively low 3.4% of the capital raised, while fees paid to underwriters and/or stockbrokers was around 2.3%, to legal firms around 0.25% and to accounting firms around 0.07%. The average underpricing by these LIC IPOs was 1.3%. This article also confirms that the percentage total direct capital raising costs are inversely related to the size of the IPO and underwritten closed-end fund IPOs tend to have higher percentage total capital raising costs than those not underwritten.