Topic: Do IPOs Affect the Market Price? Evidence from China

Speaker: Prof. SUN Qian

Host: Prof. HUANG Ying

Time: 10:00-11:30 October 14th, 2016 (Friday)

Venue: Room 602

Abstract:  We examine whether sizable initial public offerings (IPOs) affect the whole market. Using a Chinese IPO sample, we find robust evidence that sizeable IPOs depress market prices on not only the listing day but also the offering day. The IPO impact on the market is negatively correlated with the IPO size on the listing day. However, the IPO impact is largely transitory. The China Securities Regulatory Commission (CSRC) often places a moratorium on IPOs to support the market, which seems ineffective as the negative IPO effect is transitory and moratoriums are not perceived as good news.