A Study On The First-day Overvaluation Of Chinese IPO

Chinese stock market acquires illustrious achievement through the development of more than a decade. It becomes the biggest of Emerging markets in the world. A large numbers of enterprises finance by issuing new shares. It makes a tremendous role in Chinese economic development. But at the same time of the rapid development, there are also many issues. The degree of IPO overvaluation in our stock market is much higher than other countries'. This phenomenon causes many hazards. It is not conducive to the healthy development of the entire stock market. This issue has arisen due to the complex reasons. Over the years the various institutional reforms have not been able to solve this problem. So finding the reason of IPO overvaluation is important for issuance and supervision system of IPO reforms. This article intends to analyze the following aspects:First, the background and significance of this research is pointed out, the research progress at home and abroad is analyzed, and that offer theory and method support for the research of this paper.Second, the history evolution of Chinese IPO's supervision system, underwriting system and pricing process system is summarized. And It makes the analysis to these factors that influence the degree of IPO overvaluation. The changes of Shanghai Stock Index every year and change of the degree of IPO overvaluation are compared. Then Chinese market and foreign market's the degree of IPO overvaluation are compared. These lead to the research directions.Third, it finds the factors that affect the degree of IPO overvaluation. And the factors are described in subparagraph statistical analysis. It draws some preliminary judgments.Fourth, it makes a industry classification to the samples data of IPO, it makes a research to different industries'the degree of IPO overvaluation.Fifth, mathematical model are established.It finds the main factor that influence the degree of IPO overvaluation. The results show that there is a positive correlation between Shanghai Stock Index in the first day of IPO, Shanghai Stock Index change rate in the first day of IPO, turnover rate of the first day of IPO and the degree of IPO overvaluation. There is a negative correlation between the scale of IPO, IPO price and the degree of IPO overvaluation.Finally, it sums up the conclusions of the article. Rationalization proposals of IPO system are proposed.