Research On High Under-pricing In China's Medium And Small Board In Full Circulation Times

Widespread and persistent phenomenon of IPO under-pricing has become one of the three mysteries in capital market. Foreign scholars mainly focused on two assumptions:1. Primary market is competitive and effective; 2. Secondary market prices reflect full and real information, the supply of stocks is sufficient.However, after leap-forward development and mandatory intuitional reform, with features of "emerging and transitional market", Strong administrative control, irrationality of investors, the foreign theory can't give a satisfactory explanation to Chinese Market. We need to integrate the special market environment and institutional context to analyze China's IPO under-pricing.Medium and small board is the beginning of building multi-level capital market in China, settled on a financing platform for small and medium enterprises, a new sunrise industry. Under-pricing in SME market is more prominent, compared to mature economies and the main board. In times of Full Circulation, can IPO under-pricing be greatly improved? This is the problem we need to study. Starting from the assumption of non-effective secondary market, with the framework of behavioral finance,we take 198 IPOs in small and medium board as example select explaining variables in terms of investors' sentiment, market environment and company fundamentals to conduct empirical analysis, draw conclusions as follows: Investors' sentiment and market environment secondary market is the main cause of high under-pricing, instead of information asymmetry and institutional weaknesses by the traditional theory. Speculation indeed exists and gives birth to bubbles in SME market. With the deepening of market-oriented reform, the explanatory power of the model increased the impact of secondary market become increasingly prominent, while the recognition to quality increased significantly.The aim of this paper is to find the direction of improvement, promote rational regression of IPO under-pricing. Policy suggestions are put forward according to above studies, in hope of improving price discovery function of capital market, and become more rational and mature.