A-REIT seasoned equity offerings : determinants and market reaction

Chikolwa, Bwembya (2009) A-REIT seasoned equity offerings : determinants and market reaction. In 2009 AsRES-AREUEA Joint International Conference, 11-14 July 2009, Los Angeles. (Unpublished)

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The paper examines the decision by Australian Real Estate Trusts (A-REITs) to issue seasoned equity offerings from 2000 - 2008 and stock market reaction to the offerings using panel data and event study methodologies, respectively. The global financial crisis has resulted in freezing of the Australian bond markets, with several A-REITs left with seasoned equity issuance and asset sales as the only viable modes of raising additional capital. The findings review that leverage and operating risk are negative significant determinants of seasoned equity offerings; profitability and growth opportunities are positive significant determinants. Of the structure and type of properties held by the A-REIT, only stapled management structure and international operations are significant determinants. Type of properties held by A-REITs show inconsistent results. Similar to previous studies of seasoned equity offerings, we find a significant negative abnormal return associated with their announcement and no evidence of excessive leakage of information. Cross-sectional regressions show that the issued amount raised and leverage are significant factors affecting abnormal returns.

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ID Code: 26653
Item Type: Conference Paper
Refereed: Yes
Additional Information: For author's SSRN download statistics go to Author link below
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Keywords: A-REITs, seasoned equity offerings, market reaction, panel data, event study
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BANKING FINANCE AND INVESTMENT (150200) > Finance (150201)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > COMMERCIAL SERVICES (150400) > Real Estate and Valuation Services (150403)
Divisions: Past > QUT Faculties & Divisions > Faculty of Built Environment and Engineering
Past > Schools > School of Urban Development
Copyright Owner: Copyright 2009 American Real Estate and Urban Economics Association
Deposited On: 05 Aug 2009 04:14
Last Modified: 09 Jun 2010 13:56

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