Trading in Xinghua Fund - the third state-approved mutual fund - opened with a bang on the Shanghai stock exchange yesterday as investors lifted its debut price 116 per cent. The 15-year closed-end fund opened at 2.01 yuan (about HK$1.87) against its issue price of 1.01 yuan, hit a high of 2.19 yuan before closing at 2.18 yuan on turnover of 845 million units. Analysts said unlike the first two funds - Jintai and Kaiyuan - which saw high redemptions, Xinghua investors were holding on in anticipation of higher capital gains. 'Although listed about a month later than the two funds, Xinghua in one day has reached equivalent price levels, reflecting heavy demand for the fund's shares,' Newland Investment Consultancy analyst Chen Xiaozhong said. Xinghua is run by China Fund Management, controlled by Beijing-based China Securities. Jintai is sponsored by China Guotai Securities and Kaiyuan by China Southern Securities. The debut of the third fund fuelled buying interest in Jintai and Kaiyuan, which rose 0.9 per cent to 2.23 yuan and 3.39 per cent to 2.13 yuan respectively. Foreign fund managers had expressed concern over the high premiums, saying they would lead to investor disappointment, but domestic analysts were unworried. 'The price levels are appropriate as they reflect strong demand for the funds,' Shenyin & Wanguo analyst Zhou Liang said. The funds, which have priority allocation in new public offerings, have decided against buying into three new issues due for subscription on Monday, bringing to seven the number of new offers they have rejected. Analysts said this was intended to dampen the excessive enthusiasm.