The Research Of Pricing Efficiency Of Stock IPO In China

IPO, occupying the dominant position in equity financing behavior, provides those who need to finance financing channels; for the capital suppliers, IPO provides the opportunity of investment and making profits, and establish the interest-oriented mechanism, in order to promote market to optimize allocation of resources. Therefore, in reality, the problem of IPO pricing efficiency is very important. Since securities market established in 1991, the system of IPO in China has experienced numbers of reforms, from the administrative approval system to the current inquiry system. The system is becoming marketable gradually and also brought a lot of results after every reform. In June 2009, China Securities Regulatory Commission issued a new policy, hoping to make up for the in the process manufacturing, perform a price discovery function of inquiry to establish suitable for China price discovery mechanism, and solute the problem of IPO pricing efficiency.Under the background, based on the review of the literature at home and abroad, the paper found the definition of the efficiency of IPO pricing, selected China's IPO market data from 2002 to 2010, using EXCEL and SPSS17.0 to find the main factors of IPO first day returns. In addition, the article also analysis the market performance after the reform of 2009, to confirm the positive effects of reform, discover new problems, and make some recommendations. For example, increasing the stock supply; balancing market supply and demand; strictly binding behavior of institutional investors; improving market transparency and the information disclosure mechanism; giving the main underwriters over-allotment option, the implementation of "green shoe" system and so on.The paper is divided into five chapters:The first chapter, introduction, describes the basis of meaning and purpose, literature review, research methods and the lack and innovation of this article.The second chapter, asset pricing theory and the efficiency of IPO pricing, is divided into two parts:asset pricing theory and theory of efficient market hypothesis, which is the theoretical basis of this article; according to these two theories and past research of the efficiency of IPO pricing, the low efficiency of IPO pricing contains two components. This section is mainly to solve the first problem. Chapter 3, empirical analysis of IPO pricing efficiency, is a major component of this paper, mainly to solve the third problem. In this chapter, we collected IPO market data between 2002 and 2010, and the overall chronological divided into three samples Classification is based on different systems. Besides, the paper use EXCEL to process data, and use the SPSS to analysis the data.Chapter 4, reform of China's IPO and the proposed system, which is another focus of this paper, mainly to solve the third and fourth problem. This chapter first introduces the background and main contents of this reform, then analysis of the results and the problems achieved by this reform, and last some suggestions.Chapter 5, conclusion, is to summarize the paper.