China's Ipo System Changes On The Pricing Efficiency

The IPO pricing problem has been a focus problem in the Chinese securities market research. As securities market reform promoting progressively, the rationalization of IPO pricing mechanism also draws more and more attention from management department and all scholars. IPO pricing is the key of new issue market, and the rationality of issuing price affects resource allocation efficiency in our securities market. The issuing price must be able to response the company condition and market environment. According to the theory of effective market, the effectiveness of price means that the price can correctly reflect the intrinsic value of the goods at any point, and the price a result of all sorts of effects of information. Whether the IPO pricing is reasonable, and whether resource allocation is effective, depend on whether the price is the exact reaction of information.The empirical analysis prove that in most mature securities market the inhibitory rate is also unavoidable, however, the inhibitory rate in China is still higher than other countries. The huge difference of price between new issue market and the trading market causes low resource allocation, which goes against IPO reform in our securities market. So the government has been devoted to the research which mechanism combination is the best to improve efficiency, and balance the benefit of all kinds of investors, and reduce even eliminate the unreasonable speculation.The first part of this paper analyzes the important significance of the IPO pricing for development of securities market. With the study of the influence of the reform of IPO issuing system to IPO pricing, the paper analyzes the condition of IPO pricing under the combination of related system in our country. Based on the analysis of the factors that affect IPO pricing, this paper selects several main factors as regressors, and the IPO price as be explained ariables. Taking IPO located in Shanghai and Shenzhen A stock market during April 1993 to December 2009 as samples which is divided into two different phases, the paper carrys out a multivariate linear regression analysis. According to the empirical results, the paper discusses the rationality of the IPO relevant system in our country at present. Last part is the conclusion of this paper, summaries the results, then puts forward corresponding opinion suggestion of IPO.