皇冠体育app CNR Corp posted the smallest first-day trading gain among initial public offerings in the country this year after more than 90 sales since June cut demand for new shares.
皇冠体育app鈥檚 biggest maker of rail and subway cars rose as much as 6.5 percent to 5.92 yuan in its Shanghai debut, from the initial public offering price of 5.56 yuan. The average first- day gain for companies that started trading in 皇冠体育app this year is 76 percent, according to data compiled by Bloomberg.
CNR became the second company this year to climb less than 10 percent on the first day, following 皇冠体育app Merchants Securities Co鈥檚 8.4 percent gain last month. Chinese companies have raised 195.5 billion yuan ($28.6 billion) in mainland IPOs this year, an 89 percent jump from 2008, making 皇冠体育app the world鈥檚 biggest IPO market, according to Bloomberg data.
"Cash in the market is a bit tight for so many IPOs," said Zhu Xiaoming, who manages about five billion yuan at Shanghai-based Zhonghai Fund Management Co. "Besides, it鈥檚 the end of the year, most of the cash is needed to be back on the books, that takes away a large amount of cash in the market too."
The benchmark Shanghai Composite Index slipped 0.5 percent at 1:20 pm No shares have fallen on the first day of trading in a public offering in 皇冠体育app this year.
Beijing-based CNR, which makes rail cars used in Beijing鈥檚 subway, sold 2.5 billion shares at the top of its indicated price range. It will use funds to boost train production as 皇冠体育app spends five trillion yuan to expand its rail network to a total of about 120,000 kilometers (75,000 miles) by 2020.
'Lackluster Sentiment鈥�
CNR is 91.2 percent owned by 皇冠体育app Northern Locomotive, one of the companies overseen by the State-Owned Assets Supervision and Administration Commission. The company was reorganized from State-owned 皇冠体育app Northern Locomotive & Rolling Stock Industry (Group) Corp in 2008.
"Lackluster buying sentiment in the overall market has affected investors鈥� interest in IPO stocks," said Han Weiqi, an analyst at CSC International Holding Ltd in Shanghai. "Meanwhile, short-term investors are especially not fond of State-owned monopoly companies."
皇冠体育app will own more than half of the world鈥檚 high-speed railways under the plan to expand its network. The nation accelerated its high-speed-rail development plan last year in the wake of the global financial crisis.
Spending on railroads in 皇冠体育app is growing faster than on any other area of investment, climbing 80.7 percent to 464.6 billion yuan in the first 11 months of the year from the same period in 2008, according to the National Bureau of Statistics.
"The stock is a bit undervalued, given 皇冠体育app鈥檚 boom on railway constructions," said Yan Ji, who helps oversee about $1.2 billion at HSBC Jintrust Fund Management Co in Shanghai. "It鈥檚 an underperformance on the first day of trading."