China Growth Enterprice Market IPO Underpricing Empirical Study

In1999August， as the Party Central Committee， the State Council had the"innovate about strengthening a technology， develop high-tech， and realizeindustrialization decision" come on stage， is marking China Growth EnterpriseMarket has sprout. In2000， the Shenzhen securities trading market has alreadystopping float new stocks to make preparations for the setting up of GEM. But theGEM was setting aside for a part because of the NASDAQ stock market and thedomestic scandal. In2006， the China securities regulatory commission Sanguineproposed that the GEM should be push of as soon as possible. Finally on October30，2009， the china GEM had listed officially after ten years preparation. There were28companies which login on the GEM firstly， beginning to do transaction.Theestablishment of the GEM means that the multilevel capital market system in ourcountry had improved and be perfect， and can improve the effectiveness of themarket.The main standard to judge the IPO price setting reasonable or not is that theissuing price can make how closing to the secondary market expected price. In thispaper，we had use the Stata/SE12.0and Excel of ware and the empirical analysismethod to researching the quoted company’s issuing price when them login on theGEM more than two years. And we found that IPO price or phenomenon particularlyserious， enterprise market-watchers closing price reached new highs， the marketplunge atmosphere is powerful stop on December29，2011.The average price ofsuppression rate is so high by directly result that a lot of money were stuck in theprimary market， the serious influence China’s capital market resources allocationefficiency， and greatly hindered the healthy and orderly development of the GEM.Because our country the launch of the gem in a relatively short time， at present inour country， the study of the gem IPO pricing is less. in our country， the study ofthe gem IPO pricing is less at present， Because of the launch of the GEM in arelatively short time. This article through the research and analysis of the effect onour country’s IPO price of gem or factors can effectively improve the allocation ofresources in growth enterprise market efficiency， and promoting the healthydevelopment of the growth enterprise market.In the positivism part， this paper analysis that the influence factors on the IPO price rate of GEM. The results showed that the first day price earnings ratio inmarking，the enterprise actual start raising money and the enterprise market-watcherschanging hands has bigger premium rate of influence on the IPO premium rate. thispaper analysis that the first day price earnings ratio and the enterprise actual startraising money had positive correlation affect on the IPO premium rate， and theenterprise market-watchers changing hands had negative correlation on it.In the end， this paper gave Suggestions on the point of view that IPO issuancefrom of pricing market reform. The author thinking that examination and approvalshall be gradually released to approve the system to the change of regi stered system，and synchronous improve information disclosure system; perfect the IPO marketinquiry mechanism. In the process of reform， GEM shall bear the burden of pilotreform.