The Research Of GEM IPO Pricing Efficiency

Through toughening over more than ten years, The GEM finally set up in the ShenZheng security market in10.23.2009, which was reposed with many wishes. But for the short time since the GEM established, relative systems and market investors are all in baby stage, kinds of problems boomed up.For the starting, the new stocks rose up sharply. But now, so many new stocks faced breaks for the first exchanging day, and the prices of many stocks now are under their IPO prices.Before, the researches for the GEM IPO pricing efficiency are basically from the perspective of underpricing, but now facing the recent market environment and the fact, we have to rejudge the pricing efficiency of the GEM and dig out the reasons and influences against break from the perspective of break, so that improve the pricing efficiency of the GEM, that is a real urgent problem.First this paper sorts out and summarizes the existing research achievements from the perspectives of the IPO pricing s affecting factors, from the perspectives of the IPO market pricing behavior and from the perspectives of the pricing efficiency. Then from my personal understanding against the phenomenon of breaks, abstract some opinions to the GEM IPO s breaks. From above works, try to find the entry.points to the study of breaks and the affecting factors to the IPO pricing efficiency form the foundation for the after studying. Moving forward, depending on the phenomenon of breaks, make researches from the enterprises which breaked, dig out the basic informations, find out the common factors which leaded the companies to break. Then from the game between the listed companies、brokers、investors,from the perspective of brokers’reputation and benefit chain, and from whether there are VC/PE support, try to put forward the researches to the break factors. Give verifications from both the theory and demonstration.This article breakthrough the past research framework restrictions, Research GEM pricing efficiency from the new perspective of break, starting from the realistic problem, from both theoretical and empirical to study GEM break factors.Come to a more reasonable explanation, offer reference advices for the GEM healthy development.From the empirical results, factors that resulting in the break are as followings: First, break is the outcome of the game of the listed companies, brokers and investors’ interests. From the empirical analysis, the higher the total actual issue cost, the more likely result in the production of break. Another important factor that leads to break is the ratio of restricted shares. Secondly, the break is directly related to the broker’s reputation. From the results of empirical analysis, we can see that the low reputation broker underwriting issue is one of the important factors that led to the break. Finally, the break is in line with whether there are VC/PEs’support. From the empirical results, the VC/PE-backed companies on the first day is not easy to break, which we expected. Another point is the higher the online lot winning rate, the greater probability the first day break.In conclusion, give policy proposals respectively from the issue institution、the market pricing、the company itself, contribute wisdoms for improvement of the GEM IPO pricing efficiency.