Recently, new shares have been broken frequently, and many stocks have been abandoned on a large scale. With the intensification of the game of new share issuance, securities companies began to encounter problems such as floating losses of follow-up investment and the increase of underwriting amount, and the pressure on the IPO business of securities companies increased.
Market participants believe that the fully market-oriented inquiry mechanism for new shares is bound to bring about a dynamic game between investors, such as high price Bo shortlisted and breaking losses after listing. This phenomenon is more obvious in the stage when new investors pay more attention to new short-term returns. In some mature overseas capital markets, similar cyclical fluctuations will occur in the inquiry and pricing of new shares.
Many institutional people interviewed by securities companies in China said that in the face of market changes, securities companies should strengthen their pricing and underwriting ability. Through its own professional pricing ability and underwriting ability, stabilize the pricing of IPO new shares, make prudent pricing and protect the interests of investors.
increased abandonment and increased pressure on securities companies
Recently, the topic of abandonment in the new share market has attracted much attention. The amount of abandonment was as high as 780 million for nano core micro, which disclosed the issuance results on April 17.
In the view of market participants, abandonment of purchase is accompanied by breaking hair. Wu Kaida, chief strategist of deppon securities, said in an interview with Chinese reporters of securities companies that after the myth of “invincibility of new shares” was broken, the hidden risks of new shares began to be exposed, forcing investors to maintain a cautious attitude towards the breaking of new shares. At present, the risk of new losses has been transmitted to the tendency of investors to purchase new shares, resulting in frequent abandonment of purchases in the near future.
Under the new IPO system, breaking and abandoning the purchase will bring a test to securities companies. The breaking of new shares means that securities companies may encounter “floating losses” in the short term. According to the data, as of April 19, securities companies participated in the follow-up investment of 40 new shares on the science and innovation board during the year, of which 26 are currently in a state of floating losses. For example, Haitong innovation, the follow-up investment institution of Aojie technology-u, has a floating loss of 814347 million yuan.
At the same time, under the balance underwriting system, investors’ abandonment of purchase also puts great pressure on the underwriters to “take over the offer”. The amount of abandonment of NSM micro purchase is up to 780 million, all of which are underwritten by the sponsor Everbright Securities Company Limited(601788) alone. Jingwei Hengrun, a new share on the science and innovation board, was abandoned by investors for 395 million yuan. Citic Securities Company Limited(600030) this time, 2.935 million shares were underwritten, and the holding value of the stock market calculated by the issue price reached 355 million yuan.
“The increase of IPO abandonment rate not only allows securities companies to face the pressure directly, but also requires securities companies to explore the real reasons behind it and improve the current situation.” The relevant person in charge of Sinolink Securities Co.Ltd(600109) investment banks said that securities investment banks should strictly control the quality control port and recommend high-quality companies with excellent quality and qualified business to be listed; Secondly, the seller should keep enough research and prudence in the pricing of new shares; Finally, in addition to investment banking, enough attention should be paid to how to do a good job in investor education and strengthen investor service in brokerage business, and how to combine Investor Service with the concept of investor education under the registration system.
market-oriented game is increasingly strengthened
Although the breaking and abandonment of new shares have brought great pressure to securities companies, the market generally believes that these phenomena are the embodiment of the strengthening of market-oriented game after the reform of new share inquiry system.
The aforementioned person in charge of Sinolink Securities Co.Ltd(600109) investment bank said: “the adjustment and improvement of the inquiry mechanism for new shares in September last year further improved the marketization of inquiry for new shares under the registration system and significantly reduced the concentration of investors’ quotation, marking the remarkable effect of this round of system adjustment.”
The person in charge believes that the fully market-oriented inquiry mechanism for new shares is bound to lead to a dynamic game between investors, such as high price Bo shortlisted and breaking losses after listing. This phenomenon is more obvious in the stage when new investors pay more attention to new short-term earnings. In some mature overseas capital markets, there will be similar cyclical fluctuations in the inquiry and pricing of new shares.
“At present, the IPO inquiry of the registration system is in the stage of high price Bo shortlisted and reducing new income. In addition, since this year, factors such as changes in the external environment and repeated epidemics have led to large market fluctuations, and more new shares have broken under multiple influences.” The official said that the breaking of new shares is a sign of a mature capital market. There are ups and downs after the listing of new shares, indicating that the pricing of new shares fully reflects the value of listed companies.
Macro environment, market and other factors determine the price trend of new shares after listing. The fluctuation of short-term earnings after the listing of new shares will also lead investors to pay more attention to the long-term investment value of new shares and return to value research and judgment and value investment. In China’s increasingly mature capital market environment, securities companies should continue to do a good job in their own quality control, control the gateway of the capital market, support and serve the real economy and protect the interests of investors.
Wu Kaida also believes that the behavior of winning investors to abandon the purchase of new shares mainly originated from the new inquiry regulations newly revised by the Shanghai and Shenzhen Stock Exchange last September.
On the one hand, after the issuance of the new regulations on inquiry, the pricing center of new share issuance increased significantly. When the market’s recognition of the value of IPO companies remains unchanged, the higher issue price means that the purchase cost of investors increases, squeezing the profit space after the listing of new shares, and reducing the willingness of investors to pay for new shares.
On the other hand, the high issuance price of new shares faces a certain breaking risk. So far, dozens of new shares have broken on the first day of listing. After the myth of “new shares fail” is broken, playing new shares is no longer a win-win business, and the hidden risks of new shares begin to be exposed, which also forces investors to maintain a cautious attitude towards the breaking of new shares. As investors’ participation in innovation lags behind the change of income, the current loss risk of innovation has been transmitted to investors’ purchase behavior, as exemplified by the recent frequent abandonment of purchase.
“Generally speaking, it is the market mechanism that plays a role. Now the new shares issued are mainly some specific industries or unprofitable enterprises, and offline institutions have not abandoned the purchase. We believe that the supervision should maintain the policy determination. The inquiry new rules have not been out for long, so we should observe them again.” The relevant person in charge of a large brokerage investment bank admitted.
forced investment banks to make accurate pricing
However, the frequent breaking and abandonment of purchases also put forward higher requirements for the exhibition ability of securities companies and investment banks.
In terms of follow-up investment, the relevant person in charge of the aforementioned Sinolink Securities Co.Ltd(600109) investment bank said that due to the long lock-in period of follow-up investment of securities companies, the final profit and loss of follow-up investment mainly depends on the operation and long-term investment value of listed companies. The system itself is to guide issuers and main underwriters to make reasonable pricing, and also guide innovation investors on the science and innovation board to form a certain value “binding” with the main underwriter when holding new shares for a long time, Form a long-term investment concept and optimize the structure of new investors.
“Under the guidance of the system, securities companies should also do a good job in investor education through their own underwriting system, guide IPO investors to establish a long-term investment concept, and assume their responsibilities for the rapid development of new share issuance under the registration system.” The official said.
Wu Kaida believes that under the requirements of the “market-oriented pricing” of the registration system and the rational return of the income of new shares, investment banks, as professional financial intermediaries, should give full play to their industry resources and research ability to help investors better judge the real value of new shares and determine a reasonable issue price, so as to take into account the financing needs of issuers and the income pursuit of investors.
With the increasing pressure of follow-up investment and underwriting, some market views believe that securities investment banks should increase the cost of recommendation and underwriting to ensure the safety of their business.
“In fact, some securities companies do not have the ability to raise prices in the short term, and some of them still do not have the ability to deal with more risks in the IPO market.” “At present, it is more feasible for securities companies to appropriately avoid risks through accurate pricing,” said an investment banker at a securities firm in Shanghai
Wu Kaida also believes that the essence of the underwriting system of securities companies and the rules for participating in strategic placement is to balance the interests of multiple parties and convey confidence to the market. If the price of new shares is too high, it will not only increase the risk of breaking, but also lead to more investors abandoning their purchases, causing double pressure on investment banks in the underwriting system.
“Although investment banks may increase the cost of sponsorship and underwriting to increase the safety margin of IPO business, there is greater uncertainty about the loss range of the breaking of high priced new shares compared with the underwriting and underwriting cost after successful registration and issuance. Therefore, compared with increasing the fee of sponsorship and underwriting, the abandonment of new shares will force investment banks to help investors reasonably price new shares to reduce their own risk exposure.” Wu Kaida said
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