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IPO in China --Not a must win game anymore. Presented by: Di ZHANG. Brief Introduction. SHSE, SZSE opened in 1990 Limited trading style, No short, no hedge Very small QFII, mostly domestic investors Young, Energetic, Protected, Problematic. Existing problem.
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IPO in China--Not a must win game anymore Presented by: Di ZHANG
Brief Introduction • SHSE, SZSE opened in 1990 • Limited trading style, No short, no hedge • Very small QFII, mostly domestic investors • Young, Energetic, Protected, Problematic
Existing problem • IPO : Universally underpricing, especially in China • Huge gap between Primary Market & Secondary Market
Comparison • Return of registering IPO = 22.7 times of return of putting money in banks
Government policy • Price Limit Cap: P/E < 20 Crazy first trading day (X) • Free IPO pricing, 20 P/E limit cancelled Over-raised capital, P/E ratio over 50 (X)
Tight Monetary Policy • High Demand of capital for IPO • Lower P/E, • Lower first day return
First day return negative appeared • The free lunch never exist
FUTURE • More stable market • More diversified products • More educated investors • More efficient market