China Railway rises 68% on debut

China Railway will make its Hong Kong debut on Friday

Shares in China's state-owned railway builder made a strong debut in Shanghai - calming fears after weak debuts by other Chinese companies.

China Railway stocks surged 68.54% after a flotation which raised about 22.4bn yuan (£1.5bn) for the firm.

There had been some worries about its debut after the truck maker Sinotruk's shares fell 15.7% on its first day.

China Railway, which will make its Hong Kong debut on Friday saw its shares move from 4.8 yuan to 8.09 yuan.

China's benchmark Shanghai Composite Index has fallen 18% since late October amid worries about measures that the government is taking to curb inflation and a slowing in corporate earnings.

But with a near monopoly of the fast-growing Chinese railway construction industry, China Railway was popular with investors.

"New stocks are like a chance for us to win a prize," said Wu Laidi, who bought 1,000 shares

"We can recoup some of our funds from this because we have lost quite a bit in the market."

The solid debut from China Railway did not reassure the Chinese aluminium foil maker Xiashun Holdings.

The firm has decided not to proceed with its Hong Kong stock market listing because of weak market sentiment, according to sources quoted by the Reuters news agency.

The firm had been planning to start its public offering on Wednesday to raise up to $272m (£132m).