The Research Of IPO Underpricing In China's Market

IPO underpricing refers to that after a certain period of time,the market price of a stock is higher than its issue price.The IPO underpricing phenomenon exists in both Chinese and foreign stock market,meanwhile,excessive IPO underpricing will lead to the mismatch of resources in the stock market,thereby reducing the efficiency of the stock market and weakening the role of stock market.In view of IPO underpricing,academics have been working to explore the mechanism and try to improve the system to weaken or even eliminate IPO underpricing.Behavioral Finance is a new research direction in recent years.Compared with the developed international market,investors in China's stock market are more irrational.This article wants to explore the internal mechanism of IPO underpricing from the perspective of Behavioral Finance.This paper introduces the background of IPO underpricing,expounds the research results of IPO underpricing at home and abroad,and discusses the purpose and significance of writing.At the same time,this paper,combined with the history of the development of China's stock market,analyzes the irrational psychological of investors,and put s forward that the noise transaction of investors is the factor to IPO underpricing.This paper obtains 250 new stocks listed between July 1,2014 and June 30,2015,and selects 11 indicators which can reflect the psychological and attention of investors.Analyze this phenomenon through the multiple linear regression models.The empirical results show that the degree of IPO underpricing in China's stock market is affected by the lot winning rate,the issue price,the ratio of P/E,the change of the market and the growth of the investor's attention,proved that the psychology of investors and the high concern for new shares is important factors leading to China's IPO underpricing.China's IPO underpricing degree,after all,is not conducive to the healthy development of China's capital market,we should focus on investors,issuers,regulatory system to eliminate this phenomenon.