| IPO (initial public offering) is behavior that the first time issuer and its underwriters jointly make public offering of shares to specific investors or non-specific. In the capital markets, IPO short-run underpricing is existed widespread. IPO short-run underpricing is phenomenon that the IPO price is below the stock's price in the secondary market systematically (Generally, secondary market price refers to the first day closing price in the secondary market). Such short-run underpricing makes huge amounts of capital outflow from the secondary market to the primary market, also leaves the risk to the secondary market. That blocks the healthy development of capital markets. Purchase of new shares will be required to freeze a lot of money that makes a huge short-term impact on the money markets. In addition, the interference to liquidity of banks and other financial products issuing does exist.Base on fully studies on the existing documents, we review and summarize various hypotheses. After that, combined with the characteristics of Chinese A-share market, we find the potential factors affecting the IPO short-run underpricing. Then there are two steps of the empirical analysis. At the first, this study using ANOVA, Non-parameter Estimation to analyze the IPO short-run underpricing in different institutional environments and mechanism to find out the impact from them. After that, it using the factor analysis and multiple regression models analyze the causes of IPO short-run underpricing of China's A-share market in inquiry system. Finally concluded that:On the contrary of the foreign'IPO short-run underpricing'theory, China's IPO priced above the enterprise's value which financial indicators reflected. It is a'high premium'issue in fact. The high rate of return on the first day in China's A-share market is caused by the secondary market inefficiencies. According to empirical findings, this study proposes countermeasures to solve the IPO inefficiency of A-share market at the end. |
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