Research On IPO Underpricing In Chinese A-share Market

The IPO underpricing issue has been one of the most concerned ones in financial areas when the fact that the IPO underpricing phenomenon was first found in a research report of Security And Exchange Commission(SEC) since1969. As a new emerging stockmarket, China’s high IPO pricing problem has drawn much academic attention from home and abroad. China’s stock market, to a large degree, has been highly influenced by policies and speculation, mainly because of strict government regulation and investors’ irrational behavior. Then,why IPO underpricing more serious in China? Whether the several rounds of institution reform work? What is the direction of IPO reform? These are core issues of the paper.Overall, the entire system of issuing new shares from the planned to market gradually. For the current mechanism for the evolution of China’s IPO process, the IPO pricing efficiency really has been improved, now surviving in the academic community there are significant controversy. This paper will summerize the evolution of the mechanisms for issuing new shares in our country and conducted a descriptive statistics. The last part compares our issuing mechanisms to matured overseas stock market’s and gives several policy recommendations.