The Process of Going Public: Incentives and Obstacles: Case of Lebanon
| dc.contributor.author | Kazandjian, Sebouh A. | |
| dc.date.accessioned | 2024-06-06T07:50:54Z | |
| dc.date.available | 2024-06-06T07:50:54Z | |
| dc.date.issued | 2008 | |
| dc.description.abstract | A privately held firm, which is concerned about the disadvantages of using too much debt, will sometimes resort to going public. The process of selling shares to the public is known as an Initial Public Offering (IPO). Upon going public, the firm's ownership structure gets diluted and pressure is imposed on management in order to achieve projected or targeted results. Any underperformance by the firm will result in decreasing the stock price, thus, lowering the overall value of the firm and the investor's confidence. This study intends to provide an understanding of the initial public offering (IPO) process in Lebanon. The objective is to highlight the IPO process, its benefits, obstacles and disincentives. The methodology used is a survey of privately held companies in Lebanon in addition to statistical and financial analysis. We have found that the IPO process in Lebanon is still in its infancy when compared to most developed countries or even most Arab countries that have active stock markets. The political and economic instability of the country has not been encouraging many businesses to go through the IPO adventure. The number of IPO's has remained muted in recent years. The Beirut Stock Exchange (BSE), the only stock exchange in the country, was established in the 1920s and was the first in the Middle East. The BSE is currently characterized by a limited number of listed domestic companies with a low daily volume of trading. Beirut Stock Index is highly volatile due to the instability in the country. Upon examining a number of listed Lebanese companies, I found that their stock prices are not strongly affected by the political and economic conditions which currently govern the country. These companies are performing well and are generally closely held, which means that the majority of the shares are under the control of management. On the other hand, these companies have a high level of reliance on their businesses outside Lebanon. These two reasons together with others, have made these companies immune to many changes or troubling events in the country. The study proceeds as follows: Section I provides an overview of the Lebanese economy and the different components of the economy. Section II describes the common forms of business in Lebanon with the brief understanding of rules and regulations related to these businesses.. Section III discusses the history of the Beirut Stock Exchange, the administration, the listing requirements, the costs of going public, the rules concerning foreign investors and the correlation with other stock markets. Section IV analyses the pros and cons of going public in Lebanon through a survey conducted for this reason. Section V includes a financial analysis of four Lebanese publicly traded companies. Section VI concludes this paper. | |
| dc.identifier.citation | Kazandjian, S. A. (2008). The Process of Going Public: Incentives and Obstacles: Case of Lebanon (MBA thesis, Haigazian University) | |
| dc.identifier.doi | https://doi.org/10.62811/th.0039 | |
| dc.identifier.uri | https://haigrepository.haigazian.edu.lb/handle/123456789/76 | |
| dc.title | The Process of Going Public: Incentives and Obstacles: Case of Lebanon |