Comment IPO Stable Rhythm Creates Favorable Opportunity For Reform Of Distribution System.

This year's stock market is not only peaceful in stock transactions, but IPO is also very calm. Some theorists claim that over the past two years, too much IPO has led to a decline in stock trading volume and a long-term downturn in the stock index. But from the basic facts, this theory is actually divorced from reality and absurd.

According to media statistics, as of November 28th, a total of 120 enterprises in the main board, small and medium board and gem have been issued this year, issuing 2.7 weekly and financing 3 billion 690 million yuan, a slight increase over the same period last year. Since the second half of the year, the first batch of 25 enterprises of the science and technology board has issued more concentrated time, but with the normalization of audit registration work, the issuance rhythm has gradually stabilized, with an average weekly issuance of 2-3, and the average scale of financing is about 1 billion yuan per household. According to statistics, as of November 28th, the main board, small and medium-sized board and gem have approved 115 enterprises this year, financing 156 billion 309 million yuan. Compared with the whole financial market, the total amount of IPO financing is very limited. At present, there is no special statistical data on "beating the new". But with such a moderate scale of financing, it is possible to judge that the "fight for new" of the whole population is no longer the same as before.

For a long time, the fanaticism of the IPO in the stock market has been accompanied by IPO's super offer, which has become the characteristic of China's stock market. Take 2009 to 2016 as an example, there are 1458 enterprises in this stage IPO, of which 1436 are over raised, and the over raised funds amount to 344 billion 418 million yuan. However, looking at the other side, China's stock market is the IPO underpricing rate in the world's main stock market. First of all, after 2014, there is a limit to the first day of the new shares. The effective declaration price of the aggregate bidding stage can not exceed 120% of the issue price, and the increase in the continuous auction stage can not exceed 20%. After the calculation, the upper limit of the first day of the new stock will be 44%. This hard rule is rare in the global stock market. However, the greater the inhibition, the higher the rate of return on the first day of IPO, and the best strategy to invest in A shares once again. IPO over raise and IPO underpricing happen at the same time, all due to IPO opportunity scarcity. Of course, it needs to be explained that due to information asymmetry, IPO underpricing is actually a global situation, and IPO over recruitment is also a global phenomenon.

China's IPO is mainly based on the examination and approval system. Compared with loans and issuing bonds, IPO needs a variety of mortgage assets. Issuing shares is a rare opportunity to raise funds for enterprises, especially private enterprises without too much land assets. Trying to put the company on the market can achieve financial freedom. It was once a developed road map for many entrepreneurs, and many people actually practiced it. From the perspective of ultra raised funds, many studies have found that a large number of ultra raised funds have been used by the management to purchase luxury cars and even raise personal pay, which has become the gateway to their wealth. Therefore, with the approval system, there is a regular phenomenon of IPO queuing. During the downturn of stock market, there was a situation of suspending IPO, resulting in the phenomenon of IPO barrier lake. At the same time, China's capital market is hard to enter into a more difficult long-term situation, which has led to the enlargement of the value of new shares, showing a very large speculative value. Under the combination of market regulation, the high underpricing rate is highly successful.

Therefore, this year's decline in IPO data is a very welcome trend. IPO is essentially a fund mismatch phenomenon, the current IPO financing data decline and tend to be peaceful, to a certain extent, the phenomenon of capital mismatch is constantly revised. It can be said that this is the result of the regulation reform in the stock market. Because of asymmetric information, IPO underpricing comes along with IPO over subscription, which can not be completely eliminated in the stock market. However, the improvement of regulation can reduce the two situations, especially the correlation among them.

The SFC has maintained the pace of IPO in recent years, especially efforts to increase transparency in IPO approval. Although the registration system has not yet been implemented, the forced withdrawal has not yet been fully pushed out, but these reforms have been enough to improve expectations. In addition, the SFC has optimized the registration method of public offering funds, implemented differentiated registration methods, and worked hard to enhance the investment preference of equity funds, especially to further relax restrictions on foreign investors. Equity funds have more enquiry ability than ordinary small and medium-sized investors. The diversification of capital sources has greatly reduced the transaction cost of IPO inquiry.

For China's securities market this year, the scale of IPO financing is declining, while the rhythm is stable, giving market stability expectations is a good news. The regulatory authorities should further stabilize the situation. In the short term, the former measures need to be carried out more resolutely. For example, we should further encourage venture capital to play a role in the first and two tier markets. In the long run, we should also actively improve the distribution system and completely reverse the situation of IPO raising carp leapt to Longmen. Of course, there should also be mandatory stock market delisting and regulatory reform of the above cities.

Reform is not easy. At present, there are expectations for reform. We should actively seize this time window.