Research On Inquiry System And IPO Underpricing

IPO underpricing has been a puzzle haunting around all the experts for many years.This problem comes out in the mature capital market abroad first,but it happens even more sever in our country,which deals damages to companies and the investors.According to the current research,system incompetency may be the biggest factor to the problem.Aware of that,China authority has already taken on steps to reform to keep in pace of the situation.Among all the reformations,the IPO princing mechanism has been undoubtedly the most important factor.Therefore we have initiated a new method for IPO princing:inquiry system in 2005.How does it go? Is it effective? By implying a mean analyze and a deviation analyze of the IPO first day restrain rate before and behind the inquiry system,we explored the result of it.The factor which affects IPO underpricing is tested by implying multi-regression. No effective result has been found through our research.The inquiry system did not achieve the original goal.Instead of reducing IPO underpricing,it just raised the underpricing rate.There are still many problems we will have to face in the light of quest system according to this paper's research.This paper presents the complete several measures: to increase multi-channel provided by the sponsors issuer pricing valuation of the quality of the report,including the promotion of the ranks of underwriters to encourage professional development and lead underwriters through public media notice of its valuation analysis;More ways to improve the quality of information inquiry,including the Request object the establishment of institutional investors and appropriate evaluation system for small and medium-sized investors refer to the inquiry,the introduction of call-back mechanism and,as appropriate targets to increase the number of inquiry;Inquiry system and to improve the implementation of the IPO environment,and create market pricing system to Request the environment.