An Analysis On The Influencing Factors Of IPO Underpricing In Chinese Commercial Banks

IPO underpricing refers to phenomenon that the stock’s issue price is far below t its market price on the first day after its initial public offerings. In the financial sector, IPO Underpricing, together with long-term weakness of IPO and IPO hot market are recognized as the three hot problems. Especially IPO underpricing, it not only occurred in the developed securities markets in Europe and the United States, but also occurred in new securities market. According to statistics, the IPO underpricing in the new capital market is more obvious. China is an important representative of the new securities markets. When a new stock options to listing, subject to the impact of the secondary trading market’s intense speculationthe, the price volatility is unusually more intense, which lead to the result that its closing price is much higher than the issue price, and the IPO price of the situation is very serious. High IPO underpricing has always been a prominent issue in China’s securities market, which has seriously hindered the efficiency of China’s securities market play, and is not conducive to the listing and financing of Chinese enterprises, alleviating the problem of high IPO underpricing in China is of great significance to improve the efficiency of Chinese securities market and encourage Chinese enterprises to carry on the listing and financing.Considering that the Chinese commercial banks play an important role in the development of China’s financial reform, the Chinese commercial banks urgently need to improve the efficiency of the listing. What’s more, the cardinal number of our country commercial bank is huge and organization structure is relatively mature, this paper chooses the study of Chinese Commercial Bank IPO suppression price influence factors of the subject. In reference to the IPO underpricing theory at home and abroad after a review of related research, this paper takes a brief theoretical analysis on the IPO underpricing factors of our country Commercial Bank and its mechanism, and on this basis 14 possible influencing factors was receiced. Due to the large number of the factors that impact and the existing of the possible multicollinearity, the principal component analysis (PCA) was adopted to reduce dimension. Finally we got nine possible factors that may has significant influence on Chinese Commercial Bank IPO underpricing. after then we take the data of 11 listed commercial banks in China after year 2005as sample then constructed the multiple regression model of the influencing factors of IPO underpricing in Chinese commercial banks, conducted the empirical studies.Through empirical studies, it can be found that the factors that affect the IPO underpricing of Chinese commercial banks can be divided into two aspects:the external market and the commercial bank itself. Therefore, in order to reduce the IPO underpricing rate of commercial banks in China, to improve the efficiency of China’s securities market,we should adjust from three aspects:the stock market, the underwriter and the commercial bank itself.