South Locomotive books a 68.81% surge on Shanghai debut

China South Locomotive and Rolling Stock Corp, a state-owned manufacturer of train carriages in China, saw its shares shoot up 68.81% after the morning session on its trading debut in Shanghai on Monday.

Shares of the company opened 77.06% higher to RMB 3.86 from RMB 2.18, the initial public offering price, and ended the morning session 68.81% higher at RMB 3.68, beating analyst's estimate of RMB 3.5 on its first day of trading.

The benchmark Shanghai Composite Index tumbled 3.14% to end the morning session at 2373.56 points.

Last month, the China’s largest train maker had announced it planned to issue up to 3 billion new A shares, accounting for about 30% of the company’s enlarged equity, in Shanghai to raise approximately US$1.3 billion. Of all the A-shares to be issued, 750 million will be sold to institutional investors, while the remaining 2.25 billion shares will be available for retail investors.

The company also planned to float 1.6 billion H-shares on the Hong Kong Stock Exchange (HKEx). Macquarie Bank and China International Capital Corp have been assigned to arrange the H-share offering.

South Locomotive's dual Hong Kong and Shanghai offering was Asia's third-largest this year.