Empirical Study Of Chinese GEM IPO Underpricing

In October2009,28SMEs issued and listed on the Shenzhen Stock Exchange,marking the preparations for the decade of the GEM officially launched. GEM isindependent from the motherboard. It strongly coordinated the country’s industrialadjustment policies, and helped many small and medium enterprises developmentmore rapidly. There is a serious phenomenon of IPO underpricing on GEM market,affecting the efficiency of the capital market. On the basis of domestic and foreignIPO underpricing research, this article use statistical analysis and multiple regressionanalysis for IPO underpricing phenomenon. The study found that the efficiency ofsecurities companies on the pricing of shares is not high, but the overall average GEMIPO pricing and the intrinsic value is closer, the article does not support GEMoverpriced assumptions. The main factors affecting IPO underpricing are degree ofmarket economy, the issue price deviation degree of intrinsic value, the first day oflisting turnover and cash purchase in the success rate. This article made tworecommendations in the final, the first is to improve the ability of securities firmspricing, and the second is to shorten the lock time after IPO.