China A-share Initial Public Offering Price Underestimated Phenomenon

Based on the research of the former and the investigation on the development of Chinese A share initial public offerings market, the author studies A share initial public offerings underpricing by using the data of new issues in Shanghai and Shenzhen from January,2000 to November,2001. The result indicates that A share initial public offerings underpricing could be explained by the uncertainty model. Furthermore, the approval system and other system alterations have reduced the initial public offerings underpricing.