Research On The Impact Of Registration System Reform On IPO Pricing Efficiency

The IPO pricing efficiency has been the focus of academic research,enterprise practice and regulatory authorities for a long time.Especially in China’s stock market,the IPO underpricing phenomenon is quite serious with the distinctive stock issuance registration system and investors’ speculative sentiment.Using SFA model and multiple linear regression model,this paper investigates the IPO underpricing phenomenon on SSE STAR Market and Chi Next Board,with stocks listed after July 2019,and disintegrates the IPO underpricing phenomenon into the subject of pricing efficiency in the primary market and the issue of IPO underpricing rate in the secondary market.Based on the estimation results of stochastic frontier model,this paper believes an obvious premium effect in the pricing of new shares on SSE STAR Market and Chi Next Board.And a narrowing trend of the premium effect is found with further analysis from the time dimension.Especially after the underwriting method is further modified,the IPO pricing efficiency of new shares on these boards has been improved overall.At the same time,through the comparison of IPO pricing efficiency of companies listed on main board,this paper finds that there is a discount effect on IPO pricing in the primary market,which is consistent with the long-term explanation of the phenomenon of high IPO underpricing rate in A-share market.This comparison result also shows that it is necessary to select stochastic frontier model to analyze the differentiation of IPO pricing efficiency of listed companies on different boards.Under the multiple linear regression model,this paper believes that compared with the lagging effect of market sentiment,investors’ sentiment is more likely to be affected by the number of IPOs in the current month,thus affecting the trading enthusiasm in the current period.Through a comprehensive analysis of the empirical results of SFA model and multiple linear regression model,this paper argues that the reform of registration system has helped improve the marketization of IPO pricing and IPO pricing efficiency in the primary market.But the effect on solving the problem of high IPO underpricing rate has not been fully verified.This paper believes that irrational trading in the secondary market is still the main reason for the high IPO underpricing rate of China’s A-share market.Especially for the companies on SSE STAR Market and Chi Next board,the different industrial status and company types may lead investors to have previously set optimistic expectations and high emotions for the listed companies,thus increasing the instability of stock prices after listing.This paper argues that the reform of registration system,which take information disclosure as the core,has made remarkable achievements,but there is still room for improvement in strengthening investor education and realizing the coordinated development of the primary and secondary markets.In the process of comprehensively implementing the registration system,the achievements of SSE STAR Market and Chi Next board can be promoted to the main board,but the specific mechanism needs to be carefully studied and judged based on the characteristics of different boards.