An Empirical Analysis Of Ipo Underpricing In Chinese Stock Market

IPO(Initial Public Offerings)is the first time a public company has publicly issued its own shares in the market.It is the starting point for the stock company to enter the stock market.The issue of new shares is more powerful to solve the development of shares in the process of supply and demand of funds contradiction between the problem.Especially the opening of the GEM,a good mitigation of small and medium enterprises and high-tech industry,the shortage of funds and financing difficulties,and promote the development of capital markets and prosperity.In the entire IPO part of the most important is the new shares pricing.The pricing efficiency of new shares directly affects the issuance of new shares and follow-up transactions.In the eighties and seventies,there were many Western scholars who found that the closing price on the second day after the IPO was much higher than the initial pricing,resulting in huge excess returns between the primary and secondary markets.Also produced the so-called "IPO underpricence mystery."IPO underpricing exists in many countries of the securities market,China is no exception.And China's securities market was established in the 1990 s,compared with other developed countries,not only the development time is short,the system is imperfect,and IPO underpricing is more serious.In the long run,the issuance of high underpricing is not conducive to the prosperity and development of the entire stock market.First,the IPO risk is generally lower,which will provide an opportunity for market risk-free arbitrage.The successful listing of new shares means that a large number of purchase funds pooled to the issuance of the market,resulting in the stock market showed a deformity of the state,to stimulate investors to speculation,and ultimately make the allocation of resources imbalance.Second,the high purchase proceeds of new shares may make a lot of companies to market for the financial statements of fraud,seriously damaged the interests of investors.Third,institutional investors have larger size,stronger financial strength and risk prevention mechanisms than small and medium investors,and they have more investment strategies in the face of potential risks,even if they encounter unusual phenomena,But also timely stop loss.Then the risk of IPO high underpricing ultimately affect the interests of retail investors.Therefore,it is very important to take the necessary measures to control the phenomenon of IPO underpricing and reduce the market arbitrage,which is of great significance to safeguard the vital interests of small and medium investors and promote the reasonable and effective operation of the securities market.So in the Chinese stock market,the IPO price is too high in the issuance of the market is deliberately low pricing or trading market there are a lot of speculation? What are the factors that affect IPO underpricing? These are a worthwhile question.This paper is based on the empirical analysis of theoretical research.The full text is divided into six parts.The first part describes the background,research significance,research methods and technical route of the article,and reviews and summarizes the domestic and foreign literature review.From a general perspective on why to study the phenomenon of IPO underpricing and how this article will be analyzed.In addition to introducing the development of the GEM market over the years,but also from the asymmetric information,behavioral finance and other schools at three levels of IPO underpricence theory.The third part is the development of China's GEM and IPO underpriced the status quo.The fourth part is to select the capital market,the industry,corporate performance,underwriters and investor behavior of the six levels of six indicators to study,and assume that the index is how to affect the IPO underpricing.Which introduces the two dummy variables of the industry and the underwriter's reputation.The fifth part is the 425 stocks excluding the abnormal data listed on the GEM from October 30,2009 to December 31,2016.The stochastic boundary model and the multiple regression model are constructed and the multi-collinearity is different Variance correction,and finally the establishment of the corresponding regression model.Empirical studies show that the IPO market IPO underpricing is mainly caused by excessive speculation by secondary market investors.In addition,ten of the variables assumed in the article pass the test and are consistent with the previous assumptions.Among them,the release time interval,return on net assets,price-earnings ratio,the first day turnover and IPO underpriced positive correlation.Issuance price,underwriter reputation,underwriter fees,return on net assets,the first day of trading volume and Baidu index and IPO underpriced negative correlation,the model effect is more significant.The last part of the article is based on the empirical results to draw the corresponding conclusions,and on the basis of this from the regulatory,issuers and underwriters,investors,three levels of action,put forward the corresponding countermeasures in order to improve the efficiency of issuers of new shares,Advocate investors to reduce the blind speculation,better and reasonable investment.