SHANGHAI, (Reuters) - China's Industrial Securities (601377.SS) surprised by rising as much as 51 percent on its first day of trade in Shanghai on Wednesday, after it raised $394.1 million in its initial public offering.
The strong debut contrasts with a disappointing listing by Ningbo Port (601018.SS) last month. Shares of China's third-largest port operator fell 4 percent on the Shanghai Stock Exchange -- the worst performance of the mainland's top 10 IPOs this year.
By 0249 GMT, Industrial Securities, a mid-sized stockbroking firm based in Fujian Province and controlled by the local government, traded at 14.70 yuan a share. The stock started at 14.66 yuan a share, compared with its IPO price of 10 yuan.
The benchmark Shanghai Composite Index .SSEC was down 0.22 percent.
Shares of Chinese brokerages have rallied in the past week. Top brokerage Citic Securities (600030.SS) have seen its shares jump about a fifth since Oct 8. Second-ranked Haitong Securities (600837.SS) gained about 15 percent during that period.
Sentiment in brokerage shares improved after media reported that China's securities regulator planned to set a floor for brokerage trading commissions to avoid cut-throat competition in the industry.
China is the world's top IPO market so far this year after Agricultural Bank of China's (601288.SS) (1288.HK) $22.1 billion offering in Shanghai and Hong Kong. Chinese companies raised a combined $40 billion in the third-quarter of 2010, corporate advisory firm Ernst & Young said.
Citic shares were down 1.7 percent in mid-morning trade on Wednesday and Haitong was down 0.1 percent
The Fujian Provincial Department of Finance owned about 27.5 percent of Industrial Securities before the IPO. Brokerage business accounts for about 60 percent of its total revenue.
Industrial Securities' IPO price of 10 yuan a share translates into a price to earnings ratio of 29 times consensus forecasts for 2010, according to Thomson Reuters I/B/E/S. That compares with Citic Securities' 12.88 times and Haitong's 19.41 times.
Before the October rally, the outlook for Chinese brokerages were seen gloomy as a weak stock market hit their earnings.
In August, Citic Securities posted a worse-than-expected 51 percent slump in second-quarter profit as a stock market tumble hurt income from commissions and propriety trading.
