China's Ipo System Reform Of Deep Thinking

With the revolution of China’s IPO (initial public offering) system, the stock market of China has moved into another stage. According with the IPO supervisor model and the offering model, the pricing system of the new stock has experienced many times of change. Every time CSRC (China Securities Regulatory Commission) raised a new policy to accommodate with the prevailing stock market, the effect followed differs. For the time being, as we know, CSRC is planning to carry out some new policy to promote the revolution of China’s stock market. Here in this paper, we are trying to make a comparison between China’s market and the overseas market to find the potential progress that we can make. What is more, we make a retrospect of the development of China’s stock market to find the problems accompanying with the progress. We also make some positive analysis to check whether the current pricing system is reasonable.After the analysis of the issues mentioned before, we find out that China’s IPO system revolution is on a non-administration road. We realize that the IPO marketization reform has experienced several key stages. One is the checking system foundation beginning from1999, and another is the price inquiry system implemented from1January2005. These two steps marked the main reformation of the IPO system in China. Afterwards, the CSRC promulgated two more documents in2009and2010. During there two years, much more problems are raised with the reformation, such as the high P/E ratio, high raised capital and high stock price. Based on the empirical analysis of the stock price, we find out that the price is not consistent with the true value of the stock. And that is to say there is still much thing to do with the present system. We put forward some advice according with the prevailing system.One thing we can do is to improve the inquiry system. We can turn to American inquiry system rather than Dutch inquiry system. And we should also increase the percentage of stock issuing off line. Information disclosure is also important for the performance of stock market, which can restrict the behavior of the issuers and underwriters. What is more, it is necessary to build the reallocation mechanism to promote the successful issuing of new stocks. All in all, there is a long way to go to consummate China’s stock market. It is a gradual process, and many parties should take part in this revolution course to promote the utilization of capital market.