Cao Zhongming: To Cool Down The "New Shares Fever" In The Way Of Balancing Interests

On the "China capital market forum" sponsored by the Institute of Finance and securities of Renmin University of China recently, Zhu Congjiu, assistant chairman of the China Securities Regulatory Commission, delivered a speech on the "hot new shares".

In his speech, Zhu Congjiu put forward five measures to cool down the "new shares fever".

This shows that regulators will take action on the issue of high priced new shares.

After two rounds of reform of the IPO system,

There is no doubt that the issue of IPO focuses on pricing.

The price of the new issue is actually finalized by the three parties, namely the issuer, the sponsor and the inquiry organization.

The issue of "three high" issuance of new shares is rampant, and the self packaging and whitewash of the pedestrians can not be separated from the sponsoring orgnaization.

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The IPO is showing a "three high" trend. In addition to the defects of the existing mechanism, there is no pattern of balancing interests, which is obviously an important aspect that can not be ignored.

First of all, even if the issuer has packaging and gloss in the prospectus, as long as the high price issue will "circle" the money, even if the problem is exposed in the future, it will not be "delisted" after listing, it can still "live" in the market; secondly, because of the low cost of violation, it is nothing to the great interests behind.

Secondly, in the roadshow and the so-called "value investment analysis report", sponsor agencies play the role of "trumpeter". They work so hard, not for investors' sake, but for the issuer's "pocket" so as to steal more and more benefits from the market.

Third, although many of the institutions involved in the inquiry are "fighting new" in order to share the bonus of new shares, in recent years, the story of "stealing a chicken can not turn away a handful of rice" has been repeatedly repeating itself.

It is rare to profit from "beating the new", because it is not uncommon to quote a high price "lifting a rock to hit one's own foot".

The author believes that in order to curb the issue of new stocks at a high price, we must establish a set of effective checks and balances mechanism to carry out systematic rectification.

For the issuer packaging and whitewashing fraud listing, once discovered, it should be ordered immediately to withdraw from the market.

As the price of new issue is finally inquired by the inquiry organization, in order to guard against its behavior of random quotation, "human nature quotation" and "relationship quote", it is recommended to carry out the "market" allotment, that is, after determining the minimum declared quantity, the high price is placed at a high price, and the low price is placed at a low price, and its weighted average price is used as the online issue price.

In view of the fact that the fund raises the issue price while ignoring the interests of the holders in the new stock inquiry, we should reform the current fund management fee extraction mode.

The author suggests that the ratio of the management fee of the fund 1.5% be divided into two parts (for example, the split is two 0.75%), one of which 0.75% is extracted according to the scale to meet the needs of its daily business activities, and the other one depends on its profit and loss situation.

If the profit is equally extracted according to scale, if there is a loss, the part of the revenue will be "whiteboard".

In this way, the fund quotation will be more rational, and the phenomenon of raising the issue price is bound to decrease.

After the establishment of the above balancing mechanism, the issue of "three high" issuance of new shares will be eased.