The Analysis Of Gem IPOs Initial Return On Price Unlimited

The phenomenon that the new issue price of a listed company is significantly lower than the closing price of the first day of the IPO is called the first-day excess return of the IPO.The abnormal return on the first day of IPO exists in the world’s securities markets,especially in China.In order to curb the phenomenon of excess returns on the first day of IPO and curb irrational investment behavior,China’s regulatory authorities set limits on the rise and fall of new shares listed from the secondary market price control.Since the implementation of the limit policy on the first day of listing in 2014,although the drastic fluctuation of the share price on the first day of listing has been alleviated to some extent,it has also triggered the phenomenon of "one word limit" for several consecutive days after the first day of listing.In April 2020,the General Implementation Plan for the GEM Reform and Pilot Registration System was issued,which reformed the trading system of new shares.There was no limit on the rise or fall of new shares five trading days before the listing.Whether the secondary market deregulation of stock price will effectively alleviate the phenomenon of super high returns on the first day of IPO and play a role in restraining the price stability market.Based on this background,this paper verifies the impact of the first day of the GEM registration system reform without price limit policy on the first day of IPO returns,and deeply analyzes the impact mechanism of the price limit policy on the first day of IPO returns.This paper selects the data of 778 GEM listed companies from January 2014 to June 2022,compares the changes of relevant indicators before and after the policy,and uses regression model to explore specific influencing factors.The study found that the liberalization of price limit policy effectively reduced the first day yield of IPO,further eased the investor sentiment in the secondary market,guided the rational investment behavior of the market,made investors pay more attention to the fundamental indicators of the company,and put forward corresponding policy suggestions according to the study,providing certain reference value for further improving the stock trading mechanism.