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Cao Zhongming: To Cool Down The "New Shares Fever" In The Way Of Balancing Interests

2012/1/15 10:55:00 11

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On the "China capital market forum" sponsored by the Institute of Finance and securities of Renmin University of China recently, Zhu Congjiu, assistant chairman of the China Securities Regulatory Commission, delivered a speech on the "hot new shares".

In his speech, Zhu Congjiu put forward five measures to cool down the "new shares fever".

This shows that regulators will take action on the issue of high priced new shares.

After two rounds of reform of the IPO system,

New shares

The widespread "three high" issue has already caused widespread criticism in the market.

Obviously, this problem has also attracted the attention of senior officials.

At the 2012 national financial work conference held on -7 January 6th, Premier Wen Jiabao said that we should deepen the marketization reform of the IPO system, speed up the system of issuing, delisting and dividends, strengthen the supervision of the stock market, promote the healthy development of the primary and the two tier markets, and enhance the confidence of the stock market.

At the national financial working conference, the first issue of the reform of IPO system is very rare, and it also proves that there are major drawbacks in the current system.

There is no doubt that the issue of IPO focuses on pricing.

The price of the new issue is actually finalized by the three parties, namely the issuer, the sponsor and the inquiry organization.

The issue of "three high" issuance of new shares is rampant, and the self packaging and whitewash of the pedestrians can not be separated from the sponsoring orgnaization.

In this

Interest chain

In the article, the issuer and the sponsor are undoubtedly wearing a pair of trousers. Only the inquiry organization is the real "third party".

The IPO is showing a "three high" trend. In addition to the defects of the existing mechanism, there is no pattern of balancing interests, which is obviously an important aspect that can not be ignored.

First of all, even if the issuer has packaging and gloss in the prospectus, as long as the high price issue will "circle" the money, even if the problem is exposed in the future, it will not be "delisted" after listing, it can still "live" in the market; secondly, because of the low cost of violation, it is nothing to the great interests behind.

Secondly, in the roadshow and the so-called "value investment analysis report", sponsor agencies play the role of "trumpeter". They work so hard, not for investors' sake, but for the issuer's "pocket" so as to steal more and more benefits from the market.

Third, although many of the institutions involved in the inquiry are "fighting new" in order to share the bonus of new shares, in recent years, the story of "stealing a chicken can not turn away a handful of rice" has been repeatedly repeating itself.

It is rare to profit from "beating the new", because it is not uncommon to quote a high price "lifting a rock to hit one's own foot".

The author believes that in order to curb the issue of new stocks at a high price, we must establish a set of effective checks and balances mechanism to carry out systematic rectification.

For the issuer packaging and whitewashing fraud listing, once discovered, it should be ordered immediately to withdraw from the market.

Investment

If losses occur in investment activities, claims can be made through litigation to protect their interests.

As for sponsoring agencies and Bao Dai, because of advocacy of misleading, resulting in a high price issue, or blindly predicting the growth potential of the issuer, and finally showing a "quick change" or "substantial change" in performance, in addition to the punishment imposed on the sponsor and the guarantee generation, the underwriting expenses obtained by the sponsor agency shall be confiscated and a 3-5 fold fine shall be imposed.

As the price of new issue is finally inquired by the inquiry organization, in order to guard against its behavior of random quotation, "human nature quotation" and "relationship quote", it is recommended to carry out the "market" allotment, that is, after determining the minimum declared quantity, the high price is placed at a high price, and the low price is placed at a low price, and its weighted average price is used as the online issue price.

In view of the fact that the fund raises the issue price while ignoring the interests of the holders in the new stock inquiry, we should reform the current fund management fee extraction mode.

The author suggests that the ratio of the management fee of the fund 1.5% be divided into two parts (for example, the split is two 0.75%), one of which 0.75% is extracted according to the scale to meet the needs of its daily business activities, and the other one depends on its profit and loss situation.

If the profit is equally extracted according to scale, if there is a loss, the part of the revenue will be "whiteboard".

In this way, the fund quotation will be more rational, and the phenomenon of raising the issue price is bound to decrease.

After the establishment of the above balancing mechanism, the issue of "three high" issuance of new shares will be eased.