Research On Influencing Factors Of IPO Under-pricing In China's GEM

In the rapid development of China's market economy,the location of SMEs has become more and more important,they play a role to be ignored in our economy.However,because of the small size,low reputation and limited risks,SMEs have been facing huge obstacles in financing,which seriously hindered their healthy development.In October 2009,the government launched the gem market,the birth of the gem not only enriched the capital market of China,but also enabled SMEs to enter the securities market,effectively solve the financial problem of SMEs.From the first year to the end of 2016,the company of growth enterprise market in C hina has become 570,andthe total market value hasbecome52209 hundred million yuan.the rapid development of gem solves the financing problem of small and medium-sized enterprises,but many problems also exposed,especially the gem IPO underpricing.This article mainly studies related factors affecting the IPO underpricing of the gem and gives some suggestions.Ipo underpricing refers to the first day of the company's shares closing price than its IPO price,the two formed a huge difference,producedthe phenomenon of " excess profit ".The underpricing phenomenon of new shares exists in every capital market of countries,but the degree of underpricing is different,in general developed countries have relatively perfect capital market system,the degree of underpr icing is nearly the right level,about 20 %.O n the contrary,C hina's gem market,because of the lack of years,the system is not perfect,in the first year,the average number of underpricing reached 89.57%,the highest reached 207%.The average underpricing of the gem enterprises listed in 2016 also reached 43.89%.This degree of underpricing obviously is very unreasonable,andwill affect the development of the gem market in C hina.This paper summarizes the main factors of IPO underpricing in C hina gem,and divided factors into three categories,from the perspective of investment funds,investor behavior perspective and the company's own qualifications to study the IPO underpricing of C hina gem,and establish multivariate linear regression model from the latest data of gem from October 2009 to December 2016.In this paper,using multiple linear regression model to screen relevant factors,it is proposed to use more effective method lasso,and compared with the traditional stepwise re gression,find out the factors that affect the IPO underpricing of C hina's IPO market.The conclusion is as follows: 1.the participation of investment funds' influence on IPO underpricing in gem market is limited,the number of investment institutions is negatively correlated with IPO underpricing in C hina's gem market;2.the success rate issued by the new share is negatively related to the IPO underpricing in China's gem market;3.the IPO underpricing in IPOs is positively correlated with IPO underpricing in C hina's gem market.4.the price-earnings ratio of IPO shares is negatively correlated with IPO underpricing in C hina's gem market.The innovation of this paper is: 1,when the regression equation is screened,the more effectivemethod lasso and the traditional stepwise regression are compared,making the results more convincing.2.using the latest data of the gem,makes the results more consistent with the current s ituation in C hina.3.group ing the influencing factors,find out the results and make suggestions.