IPO and subsequent reform is on the market release of maximum distortion

12 October, the Commission formally issued new shares on deepening the reform of the guidance, new shares of the second stage of reform will start on 1 November.

The second stage of reform of the system of issuance of new shares, was originally the investor hopes. Since last June 10, the Commission published on further reform and improve the IPO system guidance opened the new stock market reform began, the IPO system reform by flaws and more clearly exposed in front of investors, including most notably higher issue price, high price-earnings ratio, superior placement of the "three high" issued by the entire market. Get rid of the "three high" distribution of this cancer, became investors in new shares subsequent reform of greatest expectations.

But from the Commission to publish the new shares on deepening the reform's guidance, the Commission on new shares of the second stage of reform and investor expectations exist considerable distance. IPO of subsequent reform measures not only fails to address the issue of the "three high", on the contrary, reform will also be questions, the more new shares subsequent reform is a bit disappointing.

The current round of new stock issuance system reform of the main theme is the IPO market reform, the IPO price of new shares rhythm by the market say that abandoned the original Commission on new shares for Windows Guide. The vision of the development of China's stock market, the market trend of release is correct. But at this stage, the issue of market goes beyond the present Chinese stock market environment and market release only is lame, and this is what led to the issuance of new shares market as the "three high" release. For example, in the current market release, although the issuing price of shares by the market, but the number of issued shares are restricted. Public offering of shares in number is artificially control in 25% of the total share capital, even within the control of 10% or less. And listed on the stock issue still implement a plan for regulation under the approval system, instead of the registration system. Even the effective supply of stock are no guarantee that the market will be difficult to justify issuance of nature. Although last year's reform programme in order to "adjust shares policy, increasing the number of shares available for trading," but didn't actually lawmaker. And in this time of the second stage of reform, this problem still be avoided, new shares issued on the market still only lame move forward, this is actually the market release of maximum distortion.