Neway Valve breaks IPO drought, soaring 43pc on debut

Investors keen for a slice of the first initial public offering on the mainland in 15 months propelled Neway Valve (Suzhou) to a gain of more than 43 per cent on its trading debut yesterday.

A flight of funds from existing stocks on the Shanghai exchange caused the benchmark index to drop nearly 1 per cent as it edged lower to a psychologically significant threshold.

Neway's shares jumped 43.5 per cent to 25.34 yuan (HK$32) yesterday, while the Shanghai Composite Index shed 0.93 per cent to 2,004.95, barely holding above the 2,000-point level.

Mainland investors, before the 15-month hiatus on new listings, had become accustomed to strong first-day gains of IPO shares, with most market newcomers surging at least 30 per cent.

On the mainland, stocks are subject to a 10 per cent daily trading cap, but no trading limits are imposed on the first-day trading of newly listed stocks.

Trading of Neway shares was halted just 10 seconds after the market opening yesterday as they climbed 10 per cent above the opening price of 21.19 yuan.