Reform Of Offering Mechanism、investor Sentiment And IPO Underpricing

The phenomenon of IPO under-pricing is very serious in china market and the new stock is extremely strong demanded by the investors.Since the emerge of the chinese stock market,IPO issuance rules are constantly in the reform. In June2009, CSRCissued<Guidelines To Reform and ImProve Offering Mechanism Farther>, in order to make the to perfect the mechanism of IPO. In October2010, the CSRC promulgated the<Guidance about deepening the reform of IPO system>, open a second stage reform. In this background, research on the cause of China’s IPO underpricing and the effects of IPO system reform is timesensitiveand can help point out the direction of next reform step.This paper first makes research on the cause of the IPO price in existing market environment through the stochastic frontier method.We want to know whether there is the phenomenon that the issuers reducethe price intentionally. The empirical results indicate that the ipo market does not have the the behavior of the intentional issuer discount, so the cause of the underpricing may be completely from the investor optimism in the secondary market. This paper reviewed the related literature from the perspective of investor’emotion,and the results of these papers is suitable to China’s market conditions and we tried to analyze on the causes of investor’s emotion and the influence of the IPO price of suppression. At the same time, this paper analyzes the evolution course of IPO issue system in our country.Finally, this article make three empirical study through IPO data after2005. On the one hand, we inspected the influence of investor’s emotion variables on the IPO price of suppression.Through comparing the regression results of various stages,we released the effect of the reform, and studied the change of influence on IPO price caused by investor’s emotion in the different stages.In this paper, the results show that the primary market does not have deliberately low pricing phenomenon in our country, or the cause of the IPO underprice mainly comes from the secondary market. Theinvestor emotion variable has a significant influence on to IPO underprice.Considering the reform process of marketization, on the one hand, the phenomenon of IPO underprice and the influence of investor’semotion have both been eased, on the other hand, the infulence of investors emotion on IPO price still has been serious still, especially the investors who would napp up the IPO stock in secondary market.In conclusion, our IPO issuance system reform has obtained a certain result although,but there is still a long way to go to increase the supply of new shares,information disclosure and the issue mechanism.