Research On The Influencing Factors Of IPO Underpricing In The Background Of The First-day Price Limit System Of New Shares

Underpricing of new shares has always been a common phenomenon in securities markets all over the world,and there are many researchers over this issue.However,domestic research on underpricing of new shares is concentrated on events before 2014,but after June 2014,the issue system of new shares has changed.The price-earnings ratio is limited below 23 times,and the first day trading price is also limited.Therefore,this paper mainly studies an underpricing phenomenon after the reform of the IPO system in June 2014.With investors chasing new shares,newly listed shares will show a continuous trading floor trend.At this time,the previous first day increase can no longer reflect the underpricing of the new shares.This paper studies 935 samples in four years from 2015 to 2018,and represents the degree of underpricing of new shares with the successive harden highest increase of new shares(equivalent to successive harden days of new shares).Based on the previous research results and the current market environment,this paper removes some inappropriate indicators,introduces certain new variables,and improves parts of the variables.Finally,22 financial indicators and 17 non-financial indicators are selected,which may affect the underpricing of new shares.With the application of SPSS software tools,the methods of factor analysis,stepwise regression and multiple linear regression,etc.The empirical regression results show that market prosperity,initial price,and the total market capitalization on the first day have a significant negative impact on the degree of underpricing of new shares,while broad3(gem listing),IPO costs,IPO industry price-earnings ratio have a significant positive impact on the degree of underpricing of new shares.Moreover,the underwriters' reputation,IPO price-earnings ratio and 22 financial indicators representing the company's fundamentals did not enter the optimal interpretation set.These important variables do not have an obvious impact on the underpricing of new shares,indicating that investors do not consider the financial information of the company or underwriters'reputation when buying new shares.The underpricing degree of the new shares is more influenced by the speculation of the secondary market on the new shares.And as a result of the price-to-earnings ratio limit policy,the price-earnings ratio of more than 80% of new shares are between 22 to 23 times(basically a constant),which does not mean that the issue price-earnings ratio has no impact on the underpricing of new shares.In the end,the paper gives some policy suggestions to improve the efficiency of market issuance and reduce the current high underpricing phenomenon of new shares.