Research On The Influencing Factors Of Initial Returns Of A Stock IPO

The“IPO mystery”is prevalent in the stock markets of various countries.The closing price of the IPO on the first day of the initial public offering of stocks?hereinafter referred to as the“new stock”?is usually significantly higher than the issue price,forming the“first day yield”,but China A shares Market IPOs tend to have higher yields on the first day of IPO listing.According to Boulton et al.'s statistics on 10,783 IPOs between 1998 and 2008,the world's 37 countries listed only the first day's average return level of 36.5%,while the Chinese IPO market's return rate was as high as 120.72%^[45].Therefore,in order to strengthen the trading supervision in the initial stage of IPO listing,prevent and control the speculation of new stocks,maintain market order,and protect the legitimate rights and interests of investors,the Shanghai Stock Exchange on December 13,2013 and the Shenzhen Stock Exchange respectively on June 13,2014.Strengthened the matters concerning the supervision of the initial stage of IPO trading,and provided that the effective reporting price for the IPO stage of the first day of IPO listing shall not be higher than 144%of the issue price and may not be lower than 64%of the issue price.After the re-opening of the new shares,almost all the new shares closed at the highest rate of 44%on the first day,and they were often accompanied by a continuous daily limit,which stimulated speculation on new shares.Therefore,this article chooses the IPO initial return rate of new shares,that is,the closing price of the daily limit after the IPO is listed,minus the issue price and divided by the issue price,as an indicator to measure the cumulative excess return of new IPOs under the new rules,and further study its influencing factors.This article takes the newly-listed companies from 2009 to 2016 as samples to study the influencing factors of initial returns of A-share IPOs.It was found that the IPO initial return rate for 2014-2016 was more than ten times higher than the IPO initial rate of return for 2009-2013,and the influencing factors were studied from the intentional discount of the issuer and the mispricing of the secondary market.The new regulations on new share supervision significantly affected the IPO initial return rate after 2014.After the IPO suspension in the stock market,the effect of the smoother holiday hypothesis on restarting was significant.In addition,the winners curse hypothesis,corporate control hypothesis,avoidance of litigation and investment bank reputation hypothesis,government regulation,investor sentiment were established in the 2009 A-share IPO market,but winners cursed hypothesis,corporate control The hypothesis was not established in the A-share IPO market in 2014-2016,and investor sentiment has become a factor affecting the IPO initial yield of new shares.This is because after 2014,due to the excess initial IPO yield,a large number of ordinary investors subscribed for new stocks.On the one hand,the proportion of agencies that had been allocated was lower than before 2014.Investor sentiment became the initial stage of IPO.The outstanding factors of yield,so that the winner curse hypothesis,corporate control hypothesis on the IPO initial return rate of 2014-2016 no longer significant.Finally,according to the current situation of the IPO of China's new stocks and the results of empirical research,the government,the issuer,the underwriter and the investors respectively put forward relevant recommendations.This has a certain degree of guiding significance for promoting the healthy development of China's IPO market.