The Influence Of The Reform Of New Share Issuing System On China’s Security Market

New share issuing, or initial public offering, known as IPO, is the process that the company meets certain conditions issues shares initially to the public through the security market to raise capital. The system of new share issuing, refers to a series of processes and arrangements related with pricing, underwriting and selling, when the company offers new shares on the stock market for the first time. From the beginning of China’s security market, the system of new share issuing has been reformed for several times, and has made no small achievements. At present, the new share issuing system of domestic security market is the sponsor system combined with the inquiry system of two stage. Since the Third Plenary Session of the Eighteenth Central Committee of the CPC, as our country’s financial reform has deepened, the reform of the new share issuing system has been on the agenda. In order to make sure the influence of the previous reforms of issuing system on our security market, so that make a better anticipation of the upcoming reform of new share registration system, this paper chooses the open market data of all the listing Corporation in our security market from January 1, 1991 to February 28, 2015, based on the perspective of underpricing rate, use multiple linear stepwise regression model, to carry on an empirical research and comparative analysis about the reform of our market’s new share issuing system in different periods. The first chapter of this paper sketches the research background, research purpose, research ideas and the structure of the paper. Then the second chapter and the third chapter give an introduction and a summary about the previous research results of scholars at home and abroad, analysis the similarities and differences on the system of our market’s new share issuing system in different periods, and provide an theoretical preparation and theoretical basis for the empirical analysis of following chapters. Next the paper makes use of a linear regression and multiple linear regression in Eviews software, divides the explanatory variables into three groups of system factors, corporate quality and market sentiment, with IPO underpricing rate as the dependent variable, carries out an empirical test on the reform results of our market’s new share issuing system in different periods, and then makes an analysis. Finally, this paper gives the corresponding policy recommendations. Through the empirical study above, the paper finds that with the reforms proceeding, the underpricing rate of our market decreases gradually. At the same time, the variables could have an effective influence on underpricing rate increase gradually. That is a description about the obvious effect of the reform of our market’s IPO system. But the paper’s study also finds, in different periods of the system reform, the variables have an effective influence on underpricing rate are mostly from the variable group of system factors and market sentiment, less from the corporate quality group. Especially, the influences of first-day opening gains and after-opening gains are very significant. This shows that the new share issuing system in our market still exists some problems and has a urgent needs for further reforms, particularly the registration reform. This paper argues that the registration reform can resolve the contradiction between supply and demand of the new share issuing market, keep speculation of our secondary market down, make the delisting mechanism and the accountability system perfect, spur the establishment of a multi-level capital market in China and promote a healthier development of China’s security market.