THE first firm to list on the Chinese mainland after a 14-month freeze on initial public offerings (IPOs) jumped 43.49 percent in its debut Friday, just shy of its daily limit, underscoring pent-up demand that bodes well for a raft of new issues to come.

    But any hopes of lofty fundraising targets have been dashed for now after China’s stock market watchdog said last week it will police IPO pricing behavior, concerned about a return to overpricing.

    With the heightened supervision, at least eight companies have postponed their IPOs and many have sold shares at valuations much lower than their peers.

    Neway Valve (Suzhou) Co., the major valve maker which made its debut Friday, benefited from being the first to market after the moratorium — which was put in place as authorities carried out reforms aimed at weeding out speculation and restoring investor confidence in the stock market.

    “Because this is the first one and people have been waiting for so long, definitely it will attract a lot of the interest from investors,” said Edmond Chan, capital market services group partner at PwC in Hong Kong.

    Its shares closed at 25.34 yuan, up from their IPO price of 17.66 yuan and drawing demand away from large cap stocks that helped pushed the CSI300 Index of top companies down 1.5 percent to a 5-1/2 month low. Shares are permitted to rise or fall up to 44 percent on their first day of trade.

    Neway Valve priced its US$240 million IPO before news of the closer grip on valuations. Its IPO price to earnings ratio was equivalent to 46.47 times its 2012 profit, more than double the average price to earnings ratio of 21.25 for manufacturers listed on the Shanghai Stock Exchange.

    Some 50 companies have received approval to list on the Shanghai and Shenzhen stock exchanges and more than 700 are looking to make their market debut, according to the regulator, the China Securities Regulatory Commission (CSRC).

    PwC in early January estimated that Chinese companies could raise 250 billion yuan (US$41 billion) from listings in Shenzhen and Shanghai this year.

    A Nanjing-based analyst at domestic brokerage said that while Neway’s strong debut was a good sign for other firms in the pipeline, they would not necessarily all see such huge first-day “pops.” (SD-Agencies)