Mutual Funds Urge Rational View on Short-Term IPO Volatility

Recent IPO stocks, particularly those in hot sectors, have experienced sustained price declines after listing, drawing market attention. For example, Unitree Robotics' stock fell about 30% from its first-day closing price by the fifth trading day after its listing.

A review of dozens of new stocks listed since June shows that most experienced varying degrees of pullback in the first week and first month of trading. This trend has prompted discussions about the drivers behind post-IPO volatility.

Huang Liang, deputy director of the market support and management department at China Merchants Fund, explained that the root cause lies in short-term pricing normalization. He noted that short-term pricing is driven by sentiment, while long-term valuation is anchored by fundamentals.

Given the valuation fluctuations, rational investors should return to fundamental research and maintain composure, anchoring on long-term value. This approach, he suggested, is essential for navigating market volatility and achieving sustainable returns.