Rights offerings in Spain: Effects on ex-rights stocks during the subscription period

Abstract

This paper examines the influence of the subscription rights market on the liquidity and the trading activity of ex-rights stocks during the subscription period. The results reveal that the liquidity of the ex-rights stocks, except on the two first trading days, increases during this period. Trading activity also increases, particularly in the first week and the last two weeks. The subscription rights market and the ex-rights stocks market, however, are not fully integrated markets and, in the case of non-free non-Ibex35 issues, they are practically segmented.