Research On Intonation Of Prospectus And IPO First Day Underpricing

China Securities Regulatory Commission published the policy and rules concerning with fully registration-based stock-issuing system on February 17,2023.After successive pilot on Chinese SSEStar Market as well as Growth Enterprise Market,it is noted that Chinese capital market has finally reached a new stage which is led by market itself instead of government.In the environment of fully registration-based stock-issuing system,information disclosure has a direct and significant impact on the new stocks market.And therefore the central committee of the communist of China and the State Council recently have paid great attention to improving the quality of information disclosure and the policy of issuing new stocks,hoping to make highquality information disclosure to be the key of deepening reform,in order to solve problems and chaos in the market.At the same time,this research finds that there are regulatory loopholes in the intonation disclosure of the prospectus text in the environment of fully registration-based stock-issuing system,which will lead to serious underpricing problem.Based on the information manipulation theory,the means of concealing intonation and whitewashing intonation are proposed.By using samples which was floated on the stock market within three years after registration-based stockissuing reform for observation,through reading prospectus in manual way and reorganizing dictionary,a Chinese financial emotion dictionary that fits the habituation of the expression of the prospectuses is made.By using the text analysis method,proxy variable and a multiple linear regression model are made.And it will find the relationship between the intonation of the prospectus and the first day underpricing,as well as the variables that affect the correlation between them.The specific findings are as follows:(1)There is a significant positive correlation between the concealing intonation of the prospectus and the first day underpricing.(2)There is a significant positive correlation between prospectus whitewashing intonation of the prospectus and first day underpricing.(3)The reputation of auditors can adjust the impact of intonation on underpricing.The lower the reputation of the auditors,the more significant the correlation between intonation of the prospectus and the first day underpricing.(4)The reputation of the IPO sponsors can also adjust the impact of intonation on underpricing.The higher the reputation of the IPO sponsors,the more significant the correlation between concealing intonation and first day underpricing.According to the results,it is believed that under the registration-based stock-issuing system the phenomenon of intonation affecting the first day underpricing does exist,and need to be controlled immediately.Therefore,in order to reduce the interference of intonation on the normal market order,following suggestions to the regulators are put forward:(1)Provide text information disclosure formwork specifications,improve the quality of text information disclosure and eliminate concealing information as well as whitewashing information.(2)Active the initiative of IPO inquiry and strengthen text audit inquiry and examination.(3)Enhance the supervision and regulation of intermediaries and strengthen the ability and quality of information disclosure of intermediaries.(4)Establish a more comprehensive evaluation system guided by quality for IPO sponsors.