Zhou Dylan/Wen

Over the years, under the promotion of regulatory authorities, the mechanism for new stock allocation in the A-share market has been continuously improved. However, recently, with leading technology companies such as Changxin Technology and Yushu Technology listing on the A-share market, the current new stock allocation mechanism has once again received widespread attention from ordinary investors.

Taking Yushu Technology's IPO as an example, the total number of shares issued was approximately 40.45 million, of which 20% were locked in through strategic allocation; The final issuance quantity offline is about 22.65 million shares, and the final issuance quantity online is about 9.71 million shares; The final online signing rate is only 0.018%. Such a low success rate means that ordinary investors find it extremely difficult to obtain placement opportunities.

This to some extent reveals the problems existing in the current new stock allocation mechanism.

Firstly, the "universal" nature of the new dividend has weakened. Under the current rules, the amount of new shares is tilted towards strategic allocation and offline institutions, leaving a relatively limited share for online investors, resulting in a low success rate for ordinary investors, making it difficult for them to enjoy the dividends of new shares and a lack of sense of benefit.

Secondly, market value allocation has widened the "opportunity gap" among online investors. For ordinary investors, under the market value allocation rule, the higher the market value of account holdings and the more number of allocated shares, the higher the probability of winning the lottery. This makes it more likely for new lottery opportunities to be concentrated in accounts with larger capital volumes. On the other hand, small accounts are difficult to win even if they participate in the renewal process for a long time.

Once again, the high threshold for individual signatures has further exacerbated the disadvantaged position of small investors. Under the current system, the issuance price of new shares on the Shanghai and Shenzhen stock exchanges is determined by offline institutions through inquiry. Due to the unified online subscription unit of 500 shares in the Shanghai and Shenzhen markets, for some high priced new stocks (such as Pinpin Laser), the single subscription amount can reach more than 90000 yuan, further squeezing the participation space of small investors due to the funding threshold.

Based on the actual situation of the A-share market, referring to mature market experience, and combining with the problems exposed by recent new stock listings, optimizing the new stock allocation mechanism can be approached from the following aspects.

Firstly, unify the underlying logic and general rules of new stock allocation across the entire market.

The underlying logic of new stock allocation between the Shanghai and Shenzhen stock exchanges and the Beijing stock exchange is quite different: the Shanghai and Shenzhen stock exchanges adopt "market value allocation and credit subscription", while the Beijing stock exchange adopts "full prepayment and proportional allocation". For investors, this market fragmentation can cause many unnecessary troubles. Moreover, the opening thresholds, price fluctuations, call back mechanisms, and call back ratios of the four major sectors (Main Board, Science and Technology Innovation Board, ChiNext Board, and Beijing Stock Exchange) are different, which objectively increases the difficulty for investors to allocate funds across sectors and make reasonable decisions.

So, in the long run, the underlying logic of new stock allocation in the entire market should be unified, for example, the Beijing Stock Exchange can gradually pilot "market value allocation+credit subscription". In addition, universal rules such as a unified call back mechanism and a single signing unit (currently 100 shares on the Beijing Stock Exchange) should be established, while only retaining differentiated arrangements based on sector positioning (such as investor suitability thresholds).

Secondly, optimize the callback mechanism and further improve the distribution of new shares.

Under the current callback mechanism, the callback ratio of different sectors is relatively fixed, which makes it difficult to flexibly adjust the callback ratio when the online subscription heat is extremely high or low, and it is difficult to dynamically balance the allocation shares of institutional investors and ordinary investors. Therefore, the callback gear should be optimized, especially when there is a situation of excessively high online subscription multiples, and the callback adjustment should be strengthened.

In addition, in terms of the allocation of new shares, the minimum proportion of online issuance after deducting strategic allocation should be clearly defined, and the online basic share should be moderately increased; At the same time, further standardize the admission of strategic investors, prioritize the introduction of industrial investors, stabilize capital investors (patient capital), reduce the number of related specific entities (such as employee shareholding platforms), and avoid excessive occupation of public shares.

Thirdly, improve the market value allocation algorithm and explore the "basic universal allocation+market value progressive allocation" model.

For example, setting a fixed basic number for each eligible account to ensure the guaranteed participation opportunities for small investors; After exceeding the basic allocation, allocation will be based on the daily market value, and a single account allocation limit will be set to suppress excessive resource crowding by super large accounts.

Fourthly, research on breaking down online subscription units and lowering the threshold for single signing funds.

For example, referring to the subscription units of 100 shares on the Beijing Stock Exchange, the minimum online subscription unit on the Shanghai and Shenzhen Stock Exchanges will be lowered to 100 shares in a timely manner. In this way, the number of distributable shares can be increased under the same total issuance amount, reducing the pressure of single subscription payment for high priced new shares and enabling more small investors to have the ability to participate.

In short, the capital market is an important carrier for ordinary investors to obtain property income. They are both market participants and an important component of long-term funds. Only by continuing to improve the mechanism of new stock allocation, better balancing efficiency and fair opportunities, can we further consolidate the market foundation and promote the long-term healthy development of the A-share market.

(The author is a financial commentator and the author of "Being Your Own Fund Manager: Investment Advice for Billions of Stock Investors")

(Author Zhou Dylan)