IPO UNDERPRICING PHENOMENON IN CHINA STOCK MARKET

Abstract

China capital market was started relatively late, and the government has intervened and controlled more. Therefore, China IPO underpricing problem is quite different from that of many developed countries. This article focuses on the securities market in mainland of China. So, this analysis is the IPO underpricing phenomenon of firms listed only on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. Then, it will select the IPO related data of the China stock market in the past five years, as well as exploring the degree of underpricing of Chinese IPOs and related factors through statistical analysis. Combining with other scholars' literature research, it proposes possible mitigation measures for underpricing and brings forward reasonable recommendations for the transform of the IPO pricing system.