Study On The IPO Undderpricing And Empirical Test In Small And Medium Enterprise Board

IPOs(Initial Public Offerings) is a behavior that a company sells its stocks(common stocks) publicly to investors on the stock market for the first time. Analysis indicates that IPO underpricing is a common phenomenon all over the stock market of various countries.On the morning of June 25^th,2004, shenzhen stock exchange became the focus of Chinese capital market, along with the listing of the first eight companies, The Small and Medium Enterprise(SMES) Board finally startup after waiting for a long time by the market.Its active provides financing channels for SMES, and gives many new investment opportunities to investors. Due to the difference of operation policies and listed companies'characteristics, the price fluctuation and long run performance of IPOs have disparate features on the SMES Board and mainboard. So, on the guidance of IPO underpricing theories, researching for the affecting factors and reasons of IPO underpricing, which can help us make some target suggestions for ruducing the degree of IPO underpricing, and offer some policy reference to the healthy development of SMES Board.At first, the article retrospected findings of domestic and foreign researchers about IPO underpricing, elaborated peculiarities and current situation of SMES Board. On the base of theoretical research, collecting with underpricing factors on mainboard and own characteristic on SMES Board, The paper analyzed the different underpricing reasons of the two Boards.The article also made an empirical study on SMES Board IPO initial profit margin, through the t-value test, we verified that there are IPO underpricing phenomenon on SMES Board. According to the exsisted results on mainboard, we use variables such as time interval from issuing to listing,total shares after listing,firm's age before IPO,proportion of current shares, first day trading ratio and etc to analyze IPO underpricing phenomenon on SMES Board. After researching and empirical study, we found the excessively high turnover on the initial-day is the most key factor which affects IPO underpricing on SMES Board. Long run underperformance is one of the most important empirical phenomenon related to IPO. For learning the price change on SMES Board in an all-round way, the paper made an empirical study on Long run underperformance of IPO too, found that it doesn't exsit on our SMES Board although it has been a widespread question abroad.