IT was a tough year for China’s stock traders last year — apart from those who conquered 1-in-2,500 odds to get a slice of an initial public offering (IPO).

    China’s equities surged a median 392 percent in their first month after listing last year, the best return since 1994.

    Helped by regulatory guidance that suppresses IPO valuations, newcomers soared even as the benchmark Shanghai Composite Index fell 12.3 percent, one of the world’s biggest declines. A total of 226 companies went public in China last year, the most since 2011.

    While China’s IPO profits were larger last year, they were also harder to obtain. New rules took effect Jan. 1 last year allowing investors to subscribe for shares without prepaying, meaning the average odds of getting an allocation plunged to 0.04 percent last month from 0.64 percent a year ago.

    “In a weak market, speculators crowd into new shares where they believe selling pressure is low,” said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai.

    The appetite for IPOs has been driven by abundant liquidity as well as the valuation limit of 23 times earnings, which forces companies to sell shares at levels below their listed peers, said Hong Hao, chief strategist at Bank of Communications International Holdings Co. in Hong Kong. (SD-Agencies)