Analysis And Research On IPO Underpricing Phenomenon Of China’s Stock Market

IPO refers to the behavior that a company’s first sale of shares to a large number of non-specific investors on the market. After the IPO, the company’s shares can apply to enter the stock trading market, companies are thus transformed into listed companies. Among them, the IPO pricing issue has been the focus of IPO system theory research and the reform of China’s stock market, the focus is also reflected in the primary market and the secondary market disequilibrium of contradictions. The so-called IPO underpricing refers to the issue that the stock price is lower than the price listed on the first day of trading, the scholars both at home and abroad through a lot of empirical studies have shown that both mature markets and emerging market countries are present IPO underpricing phenomenon. China’s stock market has the higher IPO underpricing rate since its inception. The stock market is an important part of the securities market, excessive underpricing will cause a secondary market unbalanced development, thereby increasing systemic risk on stocks. In China, the short-term underestimating about the first issue of new shares’price is much higher than the Western market levels. Therefore, in order to explore the influencing factors of IPO underpricing on China’s A-share market, the paper selected the initial public offering and listing data from 1997 to march 2014 on China’s Shanghai Stock Exchange and Shenzhen Stock Exchange through smooth test and multiple linear regression analysis the confirmed factors of a-share market IPO underpricing impact. Furthermore, proposing the relevant policy recommendations for the issue of high IPO underpricing of A-share market.This paper is divided into five chapters.The first chapter is the introduction, This paper is divided into five chapters, the first chapter is the introduction, the main idea of the research framework introduces the background, meaning, purpose, review relevant research at home and abroad, research, methods, and lack of innovation thesis of this article.The second chapter is the IPO underpricing theories of China’s stock market, which introduces some related concepts on IPO underpricing.The third chapter is the related theories on IPO underpricing of China’s stock market and the basic situation on IPO underpricing of China’s stock market which specifically including the overall situation of China’s IPO underpricing, causes and the adverse effects on IPO underpricing.The fourth chapter is the influencing factors on IPO underpricing of China’s stock market, the part with the full understanding of the premise of the study, on the basis of summarizing the research results of other scholars and the insufficient, analyzing the influence factors to be studied in this paper, Specific classified into three categories namely reflect the intrinsic value of listed companies influencing factors, reflect new shares issued in the primary market influencing factors and reflect new shares transactions in the secondary market influencing factors.The fifth chapter is the empirical analysis on IPO underpricing factors of China’s stock market, mainly on the selection of the sample and source select and define the variables, methods of research, analysis and testing, and regression of model results, Reached different influences on different influence factors.The sixth chapter is the conclusion, in this section, we try to answer a series of questions raised by the original article:Why the IPO underpricing phenomenon exists, what factors led to the high IPO underpricing, and on this basis we proposed relevant policy recommendations on reducing the high rate of IPO underpricing.