Can Market Be Cooling Down When China Shut the Door to IPOs?  

Oleh:

Sunghwan, Kim ; Jin, Tan ; Uk, Heo

Jenis: Article from Proceeding
Dalam koleksi: The International Symposium on Social Sciences (TISSS) and Hong Kong International Conference on Education, Psychology and Society (HKICEPS) at Hongkong, December 2013, page 58-78.
Topik: IPO; Underpricing; Shenzhen Stock Exchange and Shanghai Stock Exchange; China
Fulltext: Hong Kong-Conference 6.pdf (789.34KB)

Isi artikel

In this study, the underpricing phenomena in initial public offering(IPO) of Chinese firms that were on the exchange for the period 2000-2011 was examined. The effects of shutting down IPO market on the underpricing degree of the IPO firms and compared the effects in Shanghai Stock Exchange and Shenzhen Stock Exchange were the main focus of the study. First, the number of days between the listing day and the closure of the IPO market influences the degree of underpricing negatively. In other words, as the listing day becomes closer to the closure of the IPO market, the higher the degree of the initial underpricing. Secondly, the number of days between reopening of the IPO market and the listing day influences the degree of underpricing positively. In other words, as the listing day becomes more distant from the reopening of the IPO market, the higher the degree of the initial underpricing. Thirdly, the degree of initial underpricing before shutting down the IPO market is higher than after. These results were also seen in Shanghai and Shenzhen Stock Exchange. The results showed that shutting down the IPO market can reduce the underpricing degree of the IPO firm which will ultimately lead to the IPO market’s re-stabilization.

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