An Empirical Analysis On The Rationality Of IPO Pricing And Underpricing

Along with the fast development of the capital market of our country, more and more enterprises realize the superiority that company raises and uses funds. In the past, enterprise is in debt generally because of the indirect financing that relies on bank loan for a long period ,with a big debt-repaying pressure, operation in risk,and is hard to consider the development of enterprise on strategy. At the same time, enterprise scale is restraint greatly from capital , which is not advantageous for enterprise to realize the improvements of scale and competitiveness.Therefore enterprise finances completely through the primary capital channel ,meanwhile the arrival of IPO provides the chances for enterprise to get the long-term capital of development, improve enterprise capital structure, offer investment channel for investor , guide listed company to attract investment and promote stock market survival of the fittest.. It is the focus of domestic and international academic research that IPO ( Initial Public Offerings ) fixes prices and price factors affect on the price, especially the discrepancy of publishing price and the trade price of secondary market(abbreviated as Underpricing) exist in global capital market.The research of the IPO price reasonability under whole marketization circulation condition is few,so the research of price factors is necessary. The paper carries out main composition regression analysis,doing research on explanation ability of company's value variable for price to inspect reasonability of marketization publishing price. And positive research is made for the influencing factors of closing price of the first day of secondary market.Then the paper analyzes the high price of the secondary market.Based on the result of analysis, the major research results of this paper have verified the reasonability of marketization pricing since August 2004 inquiry system is carried out. IPO publishing price, rate of price to net asset and the first day turnover rate is the important influencing factor of closing price through the factor analysis of closing price. The results show that the reaction of IPO secondary market to price mainly focuses on worths for company's asset, as well as secondary market is for IPO. Rate of price to net asset and the first day turnover rate have explained this. At the same time in other words, IPO publishing price is tending to reasonable now. But present IPO underprice rate in average is still higher, and investors for new share catch up to hold reflects their speculative reaction.The innovation of this paper is, having carried out inquiry system following marketization price for our country in August 2004 IPO, especially after carrying out whole circulation, the main composition factor is carried out, and discovers that IPO price has reflected basically company's market value. Additionally,after the analysis of factors influencing first day closing price, IPO publishing price, rate of price to net asset and the first day turnover rate influence the first day. closing price. The three variables contributing to the first day reaches 0.749,which has explained the low price rate. It makes the explanation of price factor analysis more reliable. So, the policy related to IPO has specific aim and persuasion.