Study On Initial Public Offerings Underpricing Of Chinese Stock Market

With the rapid development of the security stock market especially the stock market in Chian,issuing stock and circulating on market became the first choice of financing for more and more enterprise．At the same time,more and more investors are attracted by the relately high initial return of stock．However, the problem of IPOs underpricing always exists in the stock market．According to the data of more than one thousand Chinese stocks,most new issues had great raise in the first trade day,and investors could acquire higher initial return than the average return of the stock market or the same industry．We find that initial returns on A-share IPOs average reached 132.24 percent．The main body of this paper is made up of six sections:In the first part,we introduced the method of the estimate of pricing decision ；In the second part,we analyzed the method of the pricing decision and issuing system in China,discussed the advantage and weakness of the various issuing methods,and compared the economic efficiency between the examine and approve system and authorization system；In the third part,we analyzed the reason of IPO's underpricing in detail from Information economics and other factors．And combined with the environment of the Chinese stock markets,We analyzed the special characteristics in China and how they effect the IPO's underpricing．In the fourth part,we analyzed the data of Chinese stock market with SPSS,made a analysis of the administrative pricing decision and market pricing decision,studied the Underpricing phenomena of Chinese stock market,and analyzed it's causes；In the fifth part,we made a analysis of the examine approve system and authorization system；And in the last part,we drew some conclusions and put forth some policy advices．The follow are the conclusions and policy advices in this dissertation:(1)From the results of this empirical study,we found that the issuing Price-Earning Ratio and the market situation before IPOs are strongly and positively associated with the underpricing of shares,the issuing scale of IPO and the hit rate are strongly and negatively associated with the underpricing；(2)We found that after the abolishing of IPO's P/E ratio and the using of authorization system ,there is no significant difference among the underpricing of shares,but considered with the market entironment,We think that the ipo's underpricing has been correspondingly reduced．(3)To reduce difference between the primary market and the second market,we suggested that we shall bring the "over-allotment option(OAO)" to bear and resume the state-owned share and corporate-owned share to circulate on market as soon possible．...