المستخلص: |
The reasons for underpricing in Saudi Arabia are examined. To explore these issues, a questionnaire survey was conducted. The questionnaire was distributed to 100 financial analysts working in the Kingdom. The results reveal that underpricing occur in Saudi Arabia for three main reasons. Firstly, underpricing happens because of the current boom in the Saudi Stock Market. Secondly, many investors lack the experience and knowledge which could help them to determine the fair price for new issues. Thirdly, liquidity in the Kingdom is very high, but at the same time investment channels are few.
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