As the new financial market in China, the Shenzhen Small and Medium-size Enterprise (SME) Stock Market and the Hong Kong Growth Enterprise Market (HKGEM) take the special tasks to promote the development of Hi-tech and start-up enterprises, drive the adjustment of the economic structure in China and the listing corporate structure of the stock market. They play more important roles in the economy and capital market in China.IPO underpricing phenomenon exists in the world, especially in China. This paper sets up the model on the basis of western theories to check the explanation on IPO underpricing in SME Stock Market and HKGEM. The result shows that the western theories can not explain these two markets well and the capital market in China is still not so effective. The reason of IPO underpricing in China should be found and solved from our own characters. And it can drive the IPO underpricing to be reasonable.Sum up, on the basis of summarizing the IPO underpring phenomenon in China, according to the condition of China, I put forward the various proposals to undertaking the growth market in mainland. |