Interim Proposal of ChiNext

Added on - 21 Apr 2020

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Running head: INTERIM PROPOSALThe ChiNext IPO initial under-pricing-the impact of risk explored in the IPO prospectusName of the Student:Name of the University:Author’s Note:
1INTERIM PROPOSALAbstractThis proposal looks to examine the impact of the factors of risk that have been revealedin the prospectus on the initial returns for the IPOs that are functioning in ChiNext with the helpof exclusive and handpicked data set. The identification of the key risk factors that are inclusiveof four key factors are discovered after the supervision and controlling of the company, marketand offer distinct features. The apprehensions for the risk lawsuit look to be most significant asthe risk can have an impact closing and the opening price returns in a positive manner andcrucially indicating the compensation of risk with the help of under pricing. The other threefactors of risk have an impact on the returns of the closing price. The infringement of thetrademark even has an impact on the closing price returns optimistically. Hence, risk exposure inthe prospectus of the IPO in ChiNext can reduce the level of risk of law suit and in that mannerhave a healthy stock market.
2INTERIM PROPOSALTable of ContentsIntroduction......................................................................................................................................3Literature Review............................................................................................................................4Data Description..............................................................................................................................7Methodology....................................................................................................................................8Conclusion.....................................................................................................................................11Reference List................................................................................................................................13
3INTERIM PROPOSALIntroductionChiNext was founded in the year 2009 in the month of October in order to help the highgrowing, innovative and private organizations to have accessibility in the capital market inChina. The focus of ChiNext on the privately associated organizations is considerably differentfrom the partial privatizations that look to govern the Chinese Main board. In order to provideaccessibility of the private high-growth companies to the capital markets, ChiNext reduces therequirements of listing on the profitability and the size of the company in comparison to the mainboard(Deng & Zhou 2015). The differences in the characteristics of the company as well as theregulatory environments that is likely to create differences in the initial public offerings under-pricing and the long-run performance for ChiNext in comparison to the SME Board and theMain Board. This paper looks to analyse the ChiNext IPO under-pricing, the performance in thelong-run and the elements and undertakes a comparison with the main board and the SME.The analysis have discovered that the IPOs in the Chinese main Board experiences anincreasing level of under-pricing and the underperformance is kind of modest with respect to theIPOs that are functioning in the developed markets. There have been debates that such uniquecharacteristics of the performance of IPO in the Chinese Main Board and are related to theirnature of partial privatization, the lack of opportunities of investment in China, separation ofequities in the listed organizations and the firm regulations of the government in the IPO process(Deng & Zhou 2017). The effect of these features is likely to fundamentally less for the IPOs ofChiNext provided that they are not significantly not partial privatisations of the assets owned bythe government faces lower level of regulatory restrictions when listing as well as ChiNext itselfgiving out the investors an added set of opportunities for the purpose of investment(Christofi etal., 2015). In this circumstances, it can be expected that the IPO under-pricing and the long run
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