Research On IPO Whole-process Price Behavior Of Chinese A-share Market

For investors, the ultimate goal of investment is to get healthy and real returns. For ahealthy and developed market, the stability of the expected return and long-term investmentvalue of listed companies are closely related. So could our current primary and secondarymarkets provide investors with such kind of return?As an access of the primary and secondary markets, the initial public offering plays animportant role in the corporate finance. IPO pricing and long-term price changes can reflectthe market efficiency in terms of yield, and IPO price behavior issue is not only an issue ofmarket, but also a reflection of the efficiency of the secondary market. Therefore, the study onIPO price behavior before and after the stock market, is vital for exploring the marketoperation rules and the efficiency.IPO whole-process price behavior is the overall change of price within a longer period afterthe listing. The IPO price behavior throughout, includes two major stages, namely theperformance of IPO underpricing and the aftermarket performance, and it includes two typesof common "vision" - that is, high initial returns and long-term weak performance. IPOunderpricing refers to that the issue price of IPO stocks listed on the first day wassignificantly lower than its market price, giving a market investors are the initial return. IPOlong-term weak refers to that as the price listed on the first day from a starting point, IPO'slong-term stock market performance is often weaker than the market return, or the return ofnon-IPO portfolio.The paper, which takes the IPO underpricing and the IPO aftermarket performance as aninterrelated and dynamic process, consdiering practical features like the policy control andequity division of Chinese A-share market, with the use of multiple models and measurementmethods, comprehensively studies the IPO of A shares price behavior , finding the cause ofhigh initial returns of Chinese IPO lies in the non-effective ness of the secondary market.On this basis, the paper from several angles, provides recommendations to improve theA-share market pricing efficiency.