Underwriter's Attributes and their Relationship with IPO Underpricing

Underwriting banks play a vital role in doing a successful initial public offering (IPO), which is considered as an important source of finance for Malaysian companies. This study aims to provide some evidence on the attributes of underwriters that affect the level of underpricing in IPOs in Malaysia. This evidence is on the application of IPO theories that are based on the information asymmetry between the IPO parties, issuing companies, underwriters, and investors. The evidence found in this study supports the consensus of the existing international evidence that IPO underpricing increases or decreases following underwriting banks¿ attributes. These findings have implications for issuing companies, investors, and security analysts.