The price differential between identical assets trading in different markets : a case study of Mondi Holdings
Master Thesis
2010
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University of Cape Town
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Abstract
This study investigates the possible explanatory factors behind the mispricing in dual traded assets, using Mondi Holdings (the PLC listed on the London Stock Exchange and the LTD listed on the Johannesburg Stock Exchange) as a case study. The study documents the existence of substantial mispricing between the Mondi twins, with the LTD trading at an average premium of 9% over the sample period. However, the reclassification of the PLC shares on the JSE resulted in a significant and sharp decline in the LTD premium to an average of 3%, an indication that regulatory controls were significant in sustaining a larger part of the price deviations.
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Includes abstract.
Includes bibliographical references (p. 41-45).
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Majoni, A. 2010. The price differential between identical assets trading in different markets : a case study of Mondi Holdings. University of Cape Town.