The Empirical Study Of The IPO Underpricing Phenomenon In China's A-share Markets

The Initial Public Offering underpricing exists almost every capital market. But the most important problem is that IPO underpricing is serious in China than other countries. It has affected the development of China stock market and the resources installs of valid. Therefore, it is significant that finding the reasons bringing about IPO underpricing and analyzing the factors carrying weight on the degree of underpricing. It can help improving Chinese IPO's issuing system, making the issuing price reflect its market price.Because of this, firstly the thesis reviews the underpricing related research, summarizes the achievement in China and the other countries. Secondly, backdates the history of Chinese stock market, summarizes the development course of the Chinese A stock IPO market. Basing on comprehending the object of research and summarizing other scholar's achievement and their limitation, this thesis classifies the samples of 788 IPOs in Shanghai stock markets from 1992 to June 2007 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 issuing modes. After researching the institutional environment in China's Stock market for the IPO underpricing, the article provided a sorted analyses to several factors-asymmetric which influenced and decided the IPO underpricing degree of China.The result indicates that Chinese IPO underpricing is obviously although it decrease steadily. It also indicates that Chinese IPO underpricing is obviously associated with the issuing Price-Earning Ratio, issuing price, the separated equity system and so on. But the factors such as the market return preceding the offering that mostly effect the Underpricing in mature capital market of developed country, but they have no obvious effect on the IPO Underpricing of China. The roots of IPO underpricing in China are regulation deficiency of the issuing system and the separated equity system. At last, based on analyzing the reasons, we suggest some measures to improve the efficiency of Chinese IPO market.