Shanghai And Shenzhen Stock Exchanges Reduce The High Price Elimination Ratio Of "Group Bidding" To No More Than 3%

In order to alleviate the "group bidding" phenomenon, the regulatory brewing for a long time to improve the pricing of new shares has finally opened the veil.

On August 20, the Shanghai Stock Exchange and Shenzhen stock exchange simultaneously solicited opinions from the public on the revision of the supporting business rules related to the issuance and underwriting of new shares on the science and technology innovation board and the growth enterprise market. The deadline is September 5, 2021.

Since the pilot registration system of the science and technology innovation board and the growth enterprise market, the overall issuance of new shares has been stable and orderly. However, in practice, some offline investors pay more attention to strategy than to research, and some new situations and new problems such as "group bidding" for Bo and interfering with the issuance order have emerged.

In this regard, the Shanghai and Shenzhen stock exchange plans to optimize and adjust the pricing mechanism of some stock issues on the science and technology innovation board and the growth enterprise market, so as to give consideration to the fairness and efficiency of new share issuance under the registration system.

On the whole, the main contents of the two rules are basically the same, including three important changes, namely, adjusting the proportion of the highest quotation rejection, abolishing the requirement of linking the IPO pricing with the subscription arrangement and the number of special announcements on investment risks, and strengthening the supervision of quotation behavior.

According to the feedback from many analysts, the regulation adjustment is in line with market expectations. On August 20, a senior investment bank personage close to regulation told the 21st century economic news reporter that "the revision of the rules can show that the regulatory authorities always pay attention to and attach great importance to the market situation."

"Three changes" to optimize pricing mechanism

As early as last September, Shangwei new material was issued at a very low price. At that time, some people in the industry called for the adjustment of the pricing system. Since then, the pricing problems of new stock issuance such as "group quotation" have also attracted frequent attention.

According to the wind data collected by 21st century economic reporter, from January to the first ten days of July, 190 enterprises applying for registration under the registration system completed online issuance, and the issuing situation was "hot and cold". Many enterprises' issuing prices continued to "break down" and were suspected to be significantly depressed by institutions.

Among them, as many as 159 enterprises failed to fully raise funds through IPO, accounting for more than 80%. Among them, 90 enterprises issued P / E ratio less than 23 times. From January to early July 2021, the proportion of enterprises with P / E ratio lower than 23 times was as high as 47.37%. Before that, enterprises with P / E ratio lower than 23 times in 2019 and 2020 accounted for 1.49% and 7.5% respectively.

The feeling of the organization is the deepest. A head public offering fund manager in Shenzhen told the 21st century economic report that "now, it is a risk-free return, and the main purpose is to obtain allocation. At present, the high price should be eliminated by 10%. In order to avoid the quotation being rejected, the investors should quote the same price as others, or even lower it is the most cost-effective quotation strategy. Otherwise, it is likely to be eliminated by high and low prices, and it is difficult to be shortlisted. "

In order to crack down on the "group" behavior of the new stock inquiry market, on August 20, the system level adjustment was finally made.

The revision of the rules issued by Shanghai and Shenzhen stock exchanges mainly includes three aspects: one is to adjust the proportion of the highest quotation. The proportion of the highest quotation rejection is adjusted from the current "no less than 10% of the total amount of all offline investors" to "no more than 3% of the total amount of all offline investors".

Second, adjust the "four values" pricing requirements. We will abolish the requirement that the IPO pricing be linked to the subscription arrangement and the number of special announcements on investors' risks. The same arrangement was also included in the CSRC's public consultation on the revision of the underwriting rules of gem on August 6.

Third, strengthen the supervision of quotation behavior. In the business rules of the exchange, the normative requirements for inquiry and quotation of offline investors are further clarified, and the possible violations are included in the scope of self-regulation. In the course of issuing and underwriting business or inquiry and quotation, the Shanghai Stock Exchange shall report the relevant clues to the CSRC for investigation and punishment. If the case is suspected to constitute a crime, the judicial organ shall investigate the criminal responsibility according to law.

Strengthen the internal game of the buyer

Among the three major revisions, the adjustment of the proportion of high tick rate has attracted much attention from the market.

"In terms of mechanism, the buyer sets the price and the seller accepts the price. This core mechanism has not been changed, it is only the adjustment of parameters. If the high price is reduced from 10% to no more than 3%, this parameter adjustment is still very sincere. It is helpful to open the centralized quotation and can fully reflect the real demand of the buyer. " On August 20, Wang Jiyue, a senior investment banker, told reporters of the 21st century economic report.

The above-mentioned senior investment banks close to supervision also told reporters of the 21st century economic report that "reducing the proportion of high price elimination will ease the psychological concerns of investors' self quotation being eliminated, encourage the lead underwriters to give full play to their underwriting ability, guide offline investors to conduct independent research and offer prices independently, and actively express their real investment willingness."

On the adjustment of the "four values" pricing requirements, the source told reporters that under the previous pricing rules, the time cost of breaking through the "four values" was high. At the same time, the extent of upward breakthrough caused by investors' group quotation was limited. Under the constraints of various factors, the issuer's pricing autonomy was relatively small“ After the adjustment, it will effectively expand the pricing decision space between the issuer and the lead underwriter, especially in the case of relatively scattered quotations, which is conducive to improving the seller's game ability and improving the pricing efficiency. "

In fact, the Shanghai and Shenzhen stock exchanges have established a normal supervision and inspection mechanism for the abnormal behavior of offline investors' quotation, and conducted many on-site inspections. At the same time, we have strengthened the handling of illegal behaviors of offline investors, and actively played the role of self-regulation in supervising and regulating, warning and deterring. In view of the fact that the current issuance business rules have not specified the punishment standard for illegal quotation behaviors of offline investors, this revision of the rules also further clarifies the regulatory requirements for quotation behavior in the business rules of the exchange.

On the whole, analysts believe that after the above rules are revised, it is expected to break the expectations of offline investors on the price ceiling, strengthen the internal game among buyers, further alleviate the "group bidding" phenomenon and break the current quotation pattern, which will help to balance the forces of all parties and maintain the normal operation of China's IPO market, Promote the formation of healthy and orderly pricing ecology.

The Shanghai Stock Exchange said that it would do a good job in collecting, evaluating, absorbing and adopting relevant feedback opinions, and timely revise and improve the business rules for issuing and underwriting stocks on the science and technology innovation board. The Shenzhen Stock Exchange also said that it would further improve the implementation rules, optimize the issuance and underwriting mechanism of gem, enhance the marketization level of issuance pricing, strengthen the supervision of the issuance and underwriting process, urge the buyers and sellers to perform their duties conscientiously, quote independently and objectively, and price prudently and reasonably, so as to jointly maintain the order of new stock issuance and better play the function of optimizing the allocation of factor resources.

?