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Since the issue of a new round of reformative measures on the IPO system, the market witness some new changes, with the phenomenon of speculation on the first day changed somewhat, and the newly issued shares seen both rise and fall on the first trading day. Among the 25 newly issued shares since May 25, 14 stocks rose while the other 11 fell on the first trading day, with an average rise of 9.45%, lower than that of before. However, a recent newly issued stock ---Yilida triggered temporary trading suspension three times on its first trading days, rising 43.94% on that day. Its rising trend continued on the second day, and hit the daily limit on price increases. It is reported that the major drive for the rise of Yilida was small-medium investors, whose awareness of risk prevention shall be further reinforced. Investors shall pay close attention to Yilida’s risk reminder announcement issued on July 5. The announcement specially mentioned that the PE for its stock price has excelled the industrial PE, which is 35.86%, thus it has the risk of being over-evaluated.
Statistics from SZSE shows that individual investors purchased 99.18% of Yilida’s share on the first trading day, among them, small-medium investors who purchased less than 50000 share account for 87.26%. However fund and other professional institution investors did not participate in the first day trading; the trading structure for the second trading day is similar to that of the first trading day, with the individual investors still dominant the investors, and purchasing 99% of the shares. Among them small-medium investors who purchased less than 50000 shares account for 85.28%.
The empirical data from the SZSE Financial Innovation Laboratory shows, more than half of the small-medium investors who participate in the first trading day of newly issued share suffer losses. The higher the new shares go on the first trading day, the heavier lost the individual suffer. In the cases of 88 new shares issued in the first half year in Shenzhen Market, small-medium investors who purchase less than 50000 shares on the first trading day accounts for 52.07% of the loss account, and their loss take up 86.47% of the total individual investors loss; in the cases of the new shares rose more than 50% on the first trading day, small-medium investors who purchased less than 50000 share on the first trading day accounts for 58.62% loss account, and their loss take up 91.65% of the total individual investors loss. Since May, the overall loss of small-medium investors who participated in the first trading day of newly issued share decreases, but still in the cases such as Haida, Dewei Advanced Materials, Fujian Jinsen, etc, the loss is still very severe with 100% of their individual investor suffer loss.
