Study On Pricing Efficiency For Initial Public Offerings Of Chinext Stock Market

Growth Enterprise Market (GEM) opened board in a preparation for over ten years on October 30th, 2009, aiming at encouraging innovative and high-tech small and medium-sized enterprises with convenient financing channels. Because the economy of China is in a transition period, compared with mature GEM in developed countries the system of the stock market is far from perfect, reflected in the unsuitable IPO pricing scheme. In comparison with main board stocks and small and medium-sized stocks, the IPO underpricing rates of GEM stocks stay high. Problems above go against the development of GEM in the long run and would eventually affect the efficiency of the whole stock market. Hence, the research in IPO pricing efficiency of GEM have a strong theoretical and practical significance in perfecting GEM system, promoting financing efficiency of small and medium-sized enterprises and improving the capital market environment.This paper firstly summarizes the theoretical study of GEM IPO pricing efficiency both at home and abroad, defines IPO pricing efficiency and adopts IPO underpricing level and the price fluctuation as the main index in measuring IPO efficiency. The third chapter makes a descriptive statistical analysis of the current situation of ChiNext IPO pricing and efficiency according to the listing conditions and characteristics. The fourth chapter makes theoretical analysis and practical research on major factors influencing IPO efficiency of ChiNext Stock Market, tracks and analyzes the price fluctuation within half a year, and further research the reason of ChiNext IPO underpricing. At last this paper proposes advice on improving IPO pricing efficiency for a better development of ChiNext Stock Markte .