The Empirical Research On The Effects Of The Fourth Reform Of IPO System On Underpricing In SME Board

With the rapidly development of the listed companies in SME, the problems of higher IPO underpricing ratio begin to emerge. The higher IPO underpricing will prompt investors to pumped money into the primary market. The higher IPO underpricing will prompt investors to pumped money into the primary market. The speculation would be inconductive to the function of funds allocation in the secondary marke and even damaged the healthy and stable development of the capital market. Against this background, the main research object is the company which is listed in SME after the fourth reform of IPO system. I will explore the effects of the Fourth Reform of IPO System on Underpricing in SME Board through the variance analysis and comparative analysis, and also analysis the causes of IPO underpricing rate of the SME market.Firstly, after summarizing the relevant theories and research results on IPO underpricing at domestic and foreign scholars, this article select the data which is listed in SME during the fourth reform of IPO system in 2010-2012 as research object. Through the regression analysis and variance analysis, verify that the reform has significant effect on IPO underpricing. Secondly, we should consider the existing system for issuing new shares and the characteristics of investors to analyze the main causes of IPO underpricing in SME market during the fourth reform of IPO system. Through comparing the difference of market environment between mainland and Hong Kong,we want to find the deep-seated reasons of IPO underpricing in SME. The results showed:(1) there is much difference between mainland and Hong Kong stock market including trade ways and the system of the issue access.(2) mainland investors are more likely to receive the impact of market volatility; most of mainland investors is less reasonable than Hong Kong; the proportion of institutional investors is less; The maturity of mainland investors is also lower. The conclusion shows: irrational emotions of investors is the main cause of the higher IPO underpricing rate in the SME, and the imperfect system in our country are fuelling investor irrational factor. At last of the paper, suggestions are proposed from the aspects of system and market, in order to provide some reference for the next round reform of IPO system.