The Issue And Pricing Power Of New Shares Should Be Truly Handed Over To The Market.

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Xiaobian of the network introduced to you that the issue of new shares and the right to price should be really handed over to the market.

China's IPO market is showing a typical seller's market characteristics, and the short-term risk free profits favored by new investors are derived.

The reform of IPO needs to be carried out smoothly. The decision-making level needs to show greater courage and boldness, adhere to the direction of market-oriented reform, and return the stock issue and pricing power to the market.

Reviewing the evolution of China's IPO auditing system, from the earliest quota system to the channel system to the present sponsor system, although the liability of the Underwriters and issuers has been increased formally, the regulation of the IPO has not been relaxed by the regulators.

With regard to issues such as the review of the issue of new shares, the price of issuing, the time of issuing, and so on, the regulatory agency has retained the substantive one vote in a variety of ways.

To ensure the quality of issuers and prevent the IPO from overhitting the market is the main reason for regulators to control the issuance of new shares.

For a long time, China's IPO market has gradually formed an abnormal pattern: the supply and demand of new shares are seriously unbalanced, and the issuers and underwriters basically do not issue underwriting pressure. The successful buyers can get a high stable return, and the price risk of new shares is mainly borne by the two tier market investors.

According to the author's estimate, since 2010, more than 800 new shares have been listed, which has risen to an average of 32% on the first day of listing compared with the issue price. After considering the success rate factor, the annual return rate of online purchase of single new shares is 6%, and the annual rate of return under the net purchase is 54%.

The main body of online purchase is individual investors.

Institutional investors are the main ones.

The success rate and the actual rate of return can be seen from the online and offline applications. Individual investors and institutional investors are quite different in the IPO market, and individual investors are generally in a disadvantaged position.

It is understandable that if an organization obtains profits from its capital, R & D or other objective advantages and gains higher than that of individual investors.

But in many cases this is not the case. Institutional investors can get greater price participation and higher success rate, thus forming a "new revenue" that is higher than that of individual investors.

The above phenomenon indicates that the problem of the IPO market in China is the contradiction between the current system and the self interested behavior of the Underwriters, resulting in the contradiction between individual investors and institutional investors.

Underwriters and institutional investors expect to continue to retain a single mode of issuing new shares according to investor classification under Internet access, and issuers and underwriters alike prefer a risk-free distribution system.

It is difficult to disclose the true value of new shares by issuing high returns.

According to the calculation, when the new shares enter the two tier market, the market performance is generally low.

On the 5 day after the listing, the average decrease of new shares was 2.6%, 10 days 3.9%, 3 months 7%, 1 years 14.6%.

As the length of the observation cycle lengthened, the decline in new shares continued to increase.

If we link the primary and secondary market performance of new shares, we can see clearly that speculative features of "fight new" are clear at a glance.

There are strong speculative emotions and a large amount of short-term funds in the market. This is the characteristics of China's stock market which is different from the developed market. In fact, it is also a common feature of the stock market in emerging market countries.

This is related to uncertain economic development track, imperfect market system and information asymmetry, and also related to the social development and cultural foundation of a country.

Speculators will speculate around a certain type of securities and pay little attention to the true value of the securities, but prefer highly liquid securities, because speculators' income mainly comes from the quick switch to buy and sell spreads.

Negotiable securities can help speculators reduce holding risk.

The excess return of the IPO market and the scarcity of new shares make it easy to become the target of market speculators.

According to the author's estimate, the average turnover rate reached 248.5% on the 5 day after the IPO, and reached 389% in 20 days.

Such a high turnover rate is difficult to achieve in many developed markets for a year.

It is a long-term task for China's stock market to defuse speculation and curb speculation.

We need to gradually improve the decisive role of the market mechanism in the allocation of funds, provide more long-term investment opportunities for investors, increase speculative costs and risks, and gradually improve the quality of investors.

Looking at the distribution pattern of the investment income of new shares, it is not difficult to find that earnings are mainly left in the group of "new players", which can be seen from the turnover rate of the first day of the new stock market up to 70%.

Most of the "hit the new" people get a profit, and the relay game is only a process of loss allocation.

It can be seen that the key interest link of new investment is in the issuing stage, and the main contradiction of interest distribution is the difference between the online purchaser and the online purchaser.

For underwriters, the most important consideration is to take advantage of under network issuing activities to take care of all the interests represented by key customers.

As for the requirements of issuers, it can basically be satisfied through a higher issuing premium, and ordinary investors who participate in online distribution are hard to get more attention.

In recent years, the key point for regulators to reform IPO is to balance the interests of online investors and offline investors, and try to find appropriate yardstick between restricting self-interest behaviors of underwriters and maintaining full market liberalization through administrative provisions, so as to better protect the interests of online public investors who occupy the main body of purchase.

Practice has proved that this yardstick is difficult to grasp.

Sometimes too many rules and too much death restrict the commercial activity space of underwriters; sometimes, the Underwriters get the right of flexible disposal to stimulate more self interested behaviors.

In the IPO market, two basic facts need to be faced: first, there is basically no resistance to the IPO at the market level, and investors are very enthusiastic about the IPO investment. For issuers, the possibility of IPO failure is very small. Second, the marketization of IPO is based on the profit seeking behavior of market players, and the system restricts the legitimate profit seeking behavior of underwriters, which is not suitable for the basic direction of market reform.

On the basis of these two facts, it is necessary to consider what kind of IPO system can better coordinate the interests of the main market players and give full play to the function of the allocation funds of the stock market. I believe that overemphasizing the role of the salesmen in the supply market is not appropriate. At least in the current China's IPO market, weakening the distribution function of the Underwriters and providing more low-cost options for issuers is beneficial to the interests of issuers and investors.

For example, issuers are allowed to issue their own distribution methods, set their own issuing prices, entrust securities dealers to sell their products on their own, even issue new shares directly to investors through the securities issuing system. They can also open new shares to underwrite the market, encourage underwriters to compete, and effectively reduce underwriting fees.

Although these practices may lead to a decrease in the traditional investment banking business of the securities industry, it will also force the securities companies to seek to develop truly valuable and meaningful investment banking business.

It can be predicted that the real opening of the IPO market will eventually reduce the enthusiasm of investors to "fight new" and "stir up new products". The information weakness of "new shares" and the information superiority of "old stocks" will enable investors to revaluate them.

In any mature stock market, funds are scarce resources, issuers are

The competition will replace the current investors' enthusiasm for the quality of new shares.

At that time, the role of investment banks can be truly reflected.