Notice of Retraction Study on IPO's underpricing and overpricing in China: Evidence from Chinese listed companies
IPO's abnormal initial return is very high in the Chinese stock market, which has seriously affected the stock market resource allocation efficiency. This paper empirical analyses abnormal initial returns of 540 new-issued A-shares which issued after the reform of split share structure from January 1st, 2006 to June 30th, 2010. It is found that the noise traders make IPO price away from its intrinsic value; in all circulated shares issue, abnormal initial return does not reduce; investor sentiment remains high, IPO price changes are closely related with the investor sentiment. Comparing IPO initial return and investor sentiment indicators before and after the financial crisis, we can see the first-day initial return has a significant difference, but no big change in investor sentiment.