China's New Stock Issue Pricing Efficiency

New stock issue pricing is one of the most important part in the issuing process.lt is a common phenomenon that the closing price on the first day exceeds the issuing price in the stock market.Scholars defined such phenomenon as the issuing underprice. The degree of the issue underpricing means the efficiency of the stock issue process.For a long time ,our country's underprcing is seriously high. The average amount of the underpricing exceeds 100%.Compared with other country ,it is too abnormal. With the implementation of the system of approval, our country begins the market-oriented process of new stocks.How high is the underprice in our country?And which factors influnced the issue price?This paper studied such questions in detail.At first we studied the foreign and domestic documents of underprice.From the study ,we find some factors which influnce the new stocks underpricing. Then we compared the difference between the administration and market-oriented procee of stock issuance in our country .We think the factors which changed a lot is very important.On this basis,we considered various kinds of hypothesis putting forward by foreign scholars.We supposed several factors related to our country's underpice such as stock market index,issuing P/E,issue price, circulating stock capital, circulating stock proportion, issuing way,the time interval of issuing and listing,etc.. Regarding these factors as independent variable and the degree of underpicing as a dependent factor,we established a linear regression model. Then we chose 127 new issuing stocks ranging from year 2001 to 2002 as our target.Aferwards we make a concrete analysis on the relationship of each factors and the underpicing.Finally ,we give some suggestions to reduce our country's issuing underprice.