The relations between IPO initial returns and price update in Chinese growth enterprise board

This paper uses the Chinese GEB IPO data from October 2009 to December 2012 to shed light on the autocorrelation of both initial returns and price update and the relations between the initial returns and price update. We find that both initial returns and price update are cyclical. These two variables are positively related. The equal-weighted average monthly initial returns are significantly positive related to the subsequent 3th month IPO price update. However, we don´t find that there exists the partial adjustment effect in Chinese GEB IPO pricing. Considering the determinants, the bigger firms tend to have higher price update. The initial returns are significantly positive related to turnover and market returns during the 30 days prior to the offering.