The Research Of IPO Underprcing On The Chinext Stock Market

IPO underpricing exists in every stock market all over the world. Many foreign scholars gave research to this issue and put forward many theories to explain them. IPO underpricing phenomenon on Chinese stock market is much more serious than on foreign stock market. So, many Chinese scholars started to study this issue. At the time when the full circulation of stocks on Chinese stock market are basically completed and the marketization of the market is accelarating, the study of IPO underpricing on the ChiNext stock market has certain theoretical and practical significance.This article is divided into six parts. The first chapter is an introduction, describes the background and significance of this research. Also the main contents of the article and the frame of the article is introduced. The second chapter is a literature review of domestic and foreign literature on IPO underpricing. The third chapter is an overview of the ChiNext. A detailed description of aspects of the ChiNext is made in order to lay the foundation for later analysis. The fourth chapter is an theoretical analysis for IPO underpricing. In this chapter some relevant view of behavioral finance is integrated. How the behavioral bias of investor such as heuristic bias, achoring effect, overconfidence, hindsight bias and investor sentiment influence the stock market is analysised, and then a hypothesis about the mechanism of IPO underpricing on the ChiNext stock market is made. The fifth chapter Chapter selected 153 stocks on the ChiNext market as a sample for an empirical analysis. The last chapter is a summary of this article.The results show that ChiNext IPO underpricing primarily related to pre-IPO market yields and lottery rate; also, investor sentiment is verified as an important factor that causes the IPO underpricing phenomenon on the ChiNext stock market.