Three China IPOs suspended from trade after surging by maximum-permitted 44 pc in debut action

Three initial public offerings on mainland stock markets surged by their daily limit 44 per cent in debut trade on Monday, as retail investors continued to chase newly listed stocks despite warnings from authorities over the risk of irrational buying.

China Galaxy Securities, Jilin JLU Communication, and Guangdong Xiongsu Technology, all rose by the maximum-permitted 44 per cent from their offer price, in an otherwise uneventful day of trade that saw the Shanghai Composite Index close slightly higher.

China Galaxy Securities, one of the country’s largest brokerage firms, was suspended from trade shortly after the market opened, after its stock was limit-up at 9.81 yuan on the Shanghai Stock Exchange.

The Beijing-based broker raised 4.09 billion yuan through its IPO, which was priced at 6.81 yuan per share.

The benchmark Shanghai Composite Index closed at 3,136.78 on Monday, up 0.4 per cent.

Jilin JLU Communication and Guangdong Xiongsu Technology were suspended from trading on the ChiNext board of the Shenzhen Stock Exchange at 7.76 yuan and 10.14 yuan respectively, as both surged by their daily maximums for new listings.

Investors had requested far more stock than quantities available, with Galaxy Securities reporting an oversubscription rate of 481 times in its online tranche, while JLU reported 2,683 times and Xiongsu 2,356 times.