The Study Of The Influence Between Noise Trading And IPO First Returns

IPO is a hot spot of research of listed companies in the financial sector since 1970s. There are many foreign literature reviews, but little systematic research in the domestic of this field. The securities market of China is an emerging market, and the development of it is not mature enough. High underpricing phenomenon always turns up in IPOs, but now the phenomenon of breaking the offering price appears again and again. The anomalies in the stock market impact the resources allocation function of the market, and disturb the normal order of the securities market. Therefore, analyzing the effect on our country's a-share first returns of IPOs and proposing the corresponding countermeasure is necessary. The traditional finance theory is built on the basis of rational investment, but now the state on stock market does not accord with the requirement. So the traditional finance theory cannot explain the full meaning of the first returns rationally on the abnormal condition. There are many reasons can affect the first returns of our country's a-share, except the objective factors such as political factors, historical factors and natural environment factors, actually investors own subjective factors accounting for a large proportion. Therefore, we use the noise trading theory to analysis the influence of the first returns, and put forward the corresponding countermeasures and suggestions.This paper is divided into four parts: the first part is the introduction section, including the research background and meaning, the present situation of the domestic and foreign development, the research content and innovations. The second part mainly introduces noise trading theory and the noise trading phenomenon of the China's securities market. The third part is the analysis of noise trading and first returns, including theoretical analysis and empirical analysis. The fourth part is the end part, including the research conclusion, countermeasures and follow-up study. The second part and the third part of the text are the emphatically discussion parts.The theoretical and empirical analysis shows that noise trading always appears in China securities market, and marks obvious influence in the first returns of the IPOs. The noise trading largely disturbs the normal order of the securities market, destroys the market reasonable allocation of resources, and encourages some unhealthy tendencies. Therefore, noise trading shall be timely discovered and controlled in reasonable range, so as to ensure the smooth completion of the trade, and maintain economic and social stability. Therefore, in order to ensure the reasonable running of the securities market, we should recognize the essence of noise trading. And we should take measures to avoid the huge losses caused by it, and at the same time, we should make full use of it. In order to achieve the most economic and reasonable state, we should prompt our securities market healthy, stable and long-term development down.