Study On Initial Public Offerings Underpricing Of Chinese Stock Market

The enterprises' direct financing on market has become an important force for China's economic development since the reform and opening-up 30 years ago, especially after the time when the China Stock Markets established. But in the stock market in China, the listed companies issue underpricing shares. Comparing the mature stock market in developed countries, a serious underpricing rate exists in China Stock Markets. This has resulted in many negative effects, and it properly could be developed into a serious social problem if it's not handled. At the same time, as the development in China Stock Markets, there is a downward trend on the high rate of underpricing. We look at the reasons why there is suck a trend from the starting level of the system in China Stock Markets.The stock market begins to run after the shares issuing. Only when the stock issuing system runs well that the stock market and even the entire capital market perform the functions of better allocation of resources. Comparing the stock market in developed countries, the lower underpricing rate will stable the capital market for a long time. At the same time it can give the stock market a full play to the role.Abroad study on the reasons why there is underpricing rate in stock markets has been more in-depth, while China's research in this area is still in its infancy. This paper draws on research at home and abroad, uses the theory of knowledge and the actual data, tries to find the system cause of the underpricing of the issued shares, analysis the impact that the changes reduce the rate of underpricing in Chinese stock distribution system. On the concrete analysis of this impact, this paper illustrates three aspects to analysis, which are stock assessment system, information disclosure system and stock pricing system. At the same time, we analysis the changes in China Stock Markets reduce the rate of underpricing indirectly, through the game between four participants in stock market, which are government, intermediaries, listed companies and investors. The rate of underpricing reduces when the system changes in stock market, which can impact the stability of stock market and the changes of stock market further.Finally, through the analysis, to develop and improve the stock issuing system in China, we need to reform and improve from the stock assessment, the information disclosure system and the pricing system, in particular to complete the registration system of market-oriented direction. The rate of underpricing can reduce in China Stock Market, which can play the role of the allocation of resources.