Shares of XD Electric, China’s largest maker of power transmissions and distribution equipment by sales, fell below their intial public offering price on weak sentiment in this year’s Shanghai stock market, the Wall Street Journal reported. Sales closed Thursday at RMB7.79 (US$1.14), down 1.4% from their IPO price of RMB7.9. Analysts had predicted the shares would rise 10%. Concerns over government moves to tighten credit were reponsible for the dampening of consumer sentiment. While XD was the first company to fall below their debut price since the government lifted the freeze on IPOs last June, it is only the most recent of a string of disappointing IPOs. "The fall in first-day gains…will contribute to reining back irrational speculative behavior. I think this is a process that will take time, but it’s a consequence that will certainly happen," said China Securities Regulatory Commission Assistant Chairman Zhu Congjiu.
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