An Empirical Research On IPO Underpricing In China's Share Security Market

IPO underpricing is popularly an existence in all the stock markets of the world. Not only it reflects the pricing efficiency of the capital assets in the stock market, but also it stands for the exertion of the financing function of the market. The dissertation studied the degree of the IPO undrepricing in China's stock market and its influential and decisive factors by empirical analyses.Based on the listing company's combination samples in Shanghai Stock Exchange and in Shenzhen Stock Exchange in the whole period of the market, the paper demonstrated the general degree of the IPO underpricing, different degree of the IPO underpricing in different years and in different issuing modes. After researching the institutional environment in China's stock market for the IPO underpricing, the article provided a sorted analyses to three factors - asymmetric information, issuing allocation, and IPO performance, which influenced and decided the IPO underpricing degree of China. Finally, the summarized analyses came out.The conclusion is that: China's IPO underpricing degree is deep, but it became lower than before to a level of ordinary developing capital market in the world with the reform of the issue supervision system and issue mode; asymmetric information induced the IPO underpricing of China; underwriters' functions, institutional interests and equity structure in the IPO allocation influenced the IPO underpricing of China; there was an negative correlation between the IPO performance and the IPO underpricing of the listing companies. The suggestions is that: to stick to the market orientation for IPO issue, to enhance information supervision, to improve quality of the listing companies and to shape rightly the behaviors of the underwriters in the stock market of China.