CGN Power is expected to rise moderately in its Hong Kong trading debut today, after China's biggest builder and operator of nuclear plants raised almost HK$24 billion in one of the most sought after initial public offerings of the year. The optimism over the stock is underpinned by the strong demand from retail investors. The retail tranche of the offering was more than 280 times oversubscribed. The shares were priced at the top of the marketing range, at HK$2.78 each, after 18 cornerstone investors - including Singapore's sovereign wealth fund GIC and US hedge fund Och-Ziff Capital - bought more than 40 per cent of the issued shares. "CGN is expected to rise at its debut to a level similar to its newly listed subsidiary, CGN Meiya Power, but the increasing market volatility may curb its upside," said Ben Kwong Man-bun, a director at brokerage house KGI Asia. "The rising volatility is due to a mix of directional trades (as investors pump money into exchange trackers to take advantage of the rising market) and the huge unwinding of leveraged bets on blue-chip companies at the same time." Shares of CGN Meiya Power, the non-nuclear power unit, have jumped 29 per cent from their offer price after a 15 per cent rise on their first day of trading, according to data provider Dealogic. The Hang Seng Index dropped 2.34 per cent yesterday, while the Shanghai Composite Index tumbled 5.43 per cent. "The Hong Kong stock market has become more speculative after the recent surge in Shanghai and Shenzhen," Kwong said. Stephen Sheung, head of investment strategy at SHK Private, said the mainland's stock markets are flush with liquidity as the central bank is expected to cut interest rates again. The demand for the nuclear firm's shares partly reflects investors' belief that the government will encourage more nuclear reactors to replace coal-fired power plants in its quest for cleaner air. CGN Power represents about 57 per cent of the country's installed nuclear power, followed by smaller rivals China National Nuclear Corp and China Power Investment Corp, according to its listing document. "Although expensive to build, nuclear plants typically provide large-scale and reliable sources of electricity generation and profits in many energy markets," rating agency Moody's said. Meanwhile, Shengjing Bank, a city commercial bank from the mainland, has joined Dalian Wanda Commercial Properties and BAIC Motor in the Hong Kong IPO race, looking to raise more than US$1 billion by the end of the year.