China\'s first stock listing in 14 months surges on debut

The first stock market listing in China for more than a year leaped more than 30 percent on its debut Friday after authorities ended a freeze on initial public offerings. Neway Valve (Suzhou) Co. was briefly suspended on the Shanghai Stock Exchange after its shares surged by almost a third from its listing price to 23.31 yuan ($3.82) shortly after the market opened. The exchange temporarily halts trading in a newly listed share if it rises or falls more than 10 percent from its opening price. After business resumed it was still quoted at around 23.19 yuan at midday, up 31.31 percent, while the broader market was down 0.56 percent. Analysts said Neway Valve's strong performance signalled a good start for dozens of companies that have initial public offering (IPO) plans. "Everyone is looking at Neway to gauge the market's enthusiasm for new listings," Yan Li, an analyst with Guosen Securities, told Dow Jones Newswires. Neway Valve is among the first batch of five companies announcing in late December that China's market regulator had given the green light for share offers, following a suspension of approvals in November 2012. The securities regulator froze IPOs to deliberate new guidelines to reform the listing process and to help avert a slide in stock prices. The China Securities Regulatory Commission (CSRC) has traditionally decided which firms can launch IPOs and when they go to market, instead of underwriters and the companies themselves, though authorities have pledged reform. So far more than 50 of the roughly 760 firms lining up for IPOs have won approval to float on China's two domestic bourses in Shanghai and Shenzhen, exchange filings show. However, while there is impressive demand for new listings, the mainland's markets have suffered heavy losses in recent weeks as investors worry about a share glut that could divert cash from other firms. Neway Valve said in an earlier statement that it raised 1.46 billion yuan from its IPO, nearly 75 percent more that it had originally sought, for investment in production facilities. Based in the eastern city of Suzhou, Neway Valve's website says it is China's biggest industrial valve manufacturer and exporter. In the first three quarters of last year, the company's revenue rose 12.5 percent year-on-year to 1.8 billion yuan, the company said. Net profit for the January-September period last year reached 353.7 million yuan, up 67 percent from a year earlier.