Study On China’s IPO Pricing Mechanism

Compared to mature foreign stock markets, Since today is still in the emerging and transition phase, it is widely IPO pricing mechanism in China’s stock market and sustained attention. In order to fully understand the complicated Chinese IPO market chaos, improving stock market mode of operation, so that resource efficiency is further improved, research on IPO pricing mechanism is inevitable. Therefore, the study of the Chinese company’s IPO pricing mechanism is conducive to making permanent cure of the market system more complete primary stage of socialism, but also conducive to the development of socialist accumulation of capital markets experience, can be said to be significant.China’s development of capital markets relatively short time, Only twenty years since the establishment of the Shanghai Stock Exchange from the time, however, was very experienced many changes, such as changes in the distribution system, pricing, and other basic information disclosure system, are very significant. Among the many changes to improve the transformation IPO pricing method is one of the Chinese stock market problem, change and progress are the most obvious change. Began in April 2005, China’s stock market continued to fall into a dilemma, and ultimately the government to halt the hope that the stock market through the regulation of supply and demand to restore the situation, but the result was lackluster. Therefore, to understand the Chinese stock market fell, the clear impact of the system on the Chinese stock market IPO, then the most sensible way is to analyze the institutional level from the IPO.In the analysis and comparison of the domestic IPO mechanism and after combing the Chinese IPO system and features, we draw the following conclusions. First, the interests of small investors in China’s stock market vulnerable situation has not been fundamentally reversed, the reversal mechanism and the "green shoe" mechanism is not fully play its due role; Second, underwriters constraint is not strong, its IPO price discovery function is not fully implemented; Third, investors due to the separation of the preliminary inquiry and bookbuilding process easily happen acts of bad faith; Finally, the current price-earnings ratio pricing methods have significant shortcomings. After the IPO pricing efficiency of different pricing methods are analyzed to validate that view, analyze a fairly meaningful conclusions: Although after continuous development and improvement of the pricing mechanism of the market has made substantial progress, but the current IPO pricing mechanism unable to be completely efficientFor solving the problems of China IPO pricing mechanism, the paper recommended that measures should be taken to make the system more perfect distribution of new shares, the underwriters constraints establish a sound mechanism, and should improve today bookbuilding system to continue to improve China’s IPO system and methods to prompting China IPO pricing mechanism to better develop and improve;...