Investor's Sentiment Is Studying The Impact Of IPO Underpricing On GEM

Since the opening of the board in October 2009,the GEM market has developed rapidly and gradually become an important part of the multi-level development of China's capital market.However,in the current Chinese special system background,the IPO underpricing is common in the Gem of our country,IPO yields of high growth companies further stimulate excessive optimism of individual investors,further pushing up the IPO initial returns.This phenomenon of IPO underpricing in GEM is partly caused by investor's sentiment fluctuation,which also seriously hinders the development of GEM market and many high-growth enterprises in the market.Thus,through in-depth study of the effect of investor sentiment on IPO underpricing of the GEM,this paper investigated whether investor's sentiment was the main reason affecting IPO underpricing of the GEM,the influencing mechanism of investor sentiment on IPO underpricing of the GEM and how to solve the above problem to improve IPO underpricing of the GEM in a reasonable manner are the main problems this article is trying to answer.This paper firstly introduces the basic situation of Chinese GEM and briefly introduces the theoretical significance of this study.After that,the author sorted out and analyzed the results of various IPO underpricing problems studied by scholars in China and abroad.Then,the research theory that conforms to the characteristics of Chinese GEM market was selected combined with the special features of China's stock market system.Based on IPO data of 484 on China's A-share GEM from October 2009 to July 2009 as the research object of empirical test,the results showed that Chinese GEM IPO underpricing degree was high with a relatively high frequency fluctuations.The GEM IPO yield was higher when investor's sentiment was high.When the money supply is volatile,the correlation between investor sentiment and IPO yields decreased and the speculative behavior of emotional investors would be restrained.Finally,relevant policies and suggestions were put forward in order to restrain IPO underpricing in Chinese GEM market and improve the system construction of China's stock market.