China Ipo Offering Mechanism

The initial underpricing of Initial Public Offering (IPO) exists in many capital markets. In China, the phenomenon is especially serious, which is injuring the financing function of the stock market, decreasing the efficiency of resources allocation and leading to the waste of the social resources. So the initial underpricing becoming a long-term hot issue is debated by researchers both in China and at abroad. In the foreign literatures, researchers mainly focus on the behaviors analysis for market participants. However, the author which has the same opinion with some Chinese researchers thinks that the offering system is an important factor for initial underpricing. Offering system includes many parts, such as the way for approving the list company, method of pricing and rules about publishing information. The paper tries to thoroughly study the influence of mechanism for pricing and distributing IPO on initial underpricing and proposes some suggestion on how to improve the mechanism for pricing and distributing IPO, decrease the initial underpricing and improve the efficiency of the primary stock market.Under above-mentioned guidelines, this paper aims at studying the characteristics of the mechanism for pricing and distributing IPO and how to improve the mechanism for pricing and distributing IPO in China. The thesis has used monetary finance, information economics etc. Along the main line of"comparison of mechanism—the evolution of mechanism in China-- the influence of mechanism on IPO pricing efficiency—the improvement of mechanism in China", this paper has analyzed and investigated in detail the importance of the mechanism for pricing and distributing IPO and the way for marketilized reform.First, this thesis compares characteristics of the three mechanisms used frequently now and points out that book-building method will be the international trend. This part provides the reference for study on...