The largest shareholder of an issuing firm in Hong Kong can be the underwriter for rights offers and open offers. We hypothesize that being an underwriter the largest shareholder who possesses more information is better than investment banks in certifying firm value and we find the evidence to...

Investors react adversely to the announcements of rights offers in Hong Kong and the abnormal return of rights offers on the announcement day is -12.10%. After taking price discounts, underwriting fees and abnormal returns into consideration, the total direct and indirect costs of the seasoned...