of IPO stocks depicts two anomalies: initial underpricing and long run
underperformance. A plethora of studies have established the
causes of these IPO puzzle to include information
asymmetry, institutional ownership, IPO size,
market volatility, the intrinsic value of the IPO and issue characteristics
among others. None of these
studies on IPO performance as far as research has shown considered moderating
effect of automation of securities market on firm specific factors. Kenya’s equity
market capitalization has been on a downward trend being surpassed by fixed
income securities. IPO stocks performance offer long-term as well as
short-term capital to companies. This study attempts to establish
whether there is a nexus between NSE automation and firm specific factors
regarding performance of IPO stocks at NSE. Longitudinal and
descriptive study designs were used on the secondary panel data. Multiple
linear regression was used to analyze the data with Stata statistical software.
The Hausman test was used to determine between fixed
and random effect model. The results showed that automation
had negative correlation with firm age and positive correlation with firm size.
The study will assist the Kenyan government in developing financial stability
measures and investors in making informed decisions.
Keywords: Automation, Firm specific factors, Initial
Public Offerings, Nairobi Securities Exchange.