Investments, tenth edition

ufl.edu/ritter/ipodata.htm.   

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  C H A P T E R  

3

 How 

Securities 

Are 

Traded 

63

0%

25%

50%

75%

100%

Average First-Day Returns

125%

150%

175%

Argentina

Russia

Canada

Austria

Chile

Denmark

Norway

Netherlands

Turkey

France

Turkey

Spain

Nigeria

Portugal

Israel

Belgium

Mexico

Hong Kong

Israel

United Kingdom

United States

Finland

Australia

Indonesia

New Zealand

Philipines

Iran

Italy

Poland

Cyprus

Ireland

Greece

Germany

Singapore

Sweden

South Africa

Thailand

Taiwan

Japan

Brazil

Korea

Malaysia

India

China

Figure 3.2 

Average first-day returns on IPOs from around the world

 Source: Provided by Professor J. Ritter of the University of Florida, 2008. This is an updated version of the information contained in 

T. Loughran, J. Ritter, and K. Rydqvist, “Initial Public Offerings,”  Pacific-Basin Finance Journal  2 (1994), pp. 165–199. Copyright 1994 

with permission from Elsevier Science. 

    3.2 

How Securities Are Traded 

  Financial markets develop to meet the needs of particular traders. Consider what would 

happen if organized markets did not exist. Any household wishing to invest in some type 

of financial asset would have to find others wishing to sell. Soon, venues where interested 

traders could meet would become popular. Eventually, financial markets would emerge 

from these meeting places. Thus, a pub in old London called Lloyd’s launched the mari-

time insurance industry. A Manhattan curb on Wall Street became synonymous with the 

financial world.