Neway Valve surges in Shanghai as China IPO freeze ends China's first initial public offering for more than a year got off to a flying start, rising 20 per cent in the initial hours of trading. Shares in Suzhou-based Neway Valve rose sharply on Friday after the company raised $240m from a Shanghai listing, marking the end of a regulator-forced freeze in the primary market. In 2012, China was the world's second-biggest IPO market, after the US. But concerns about the quality of companies waiting to list, and the sheer number of them - almost 900 at one point - prompted the China Securities Regulatory Commission to block all new listings. In the 15 months that followed, the regulator ordered a series of fresh checks on the accounts of those wanting to list, and completed a major overhaul of listing rules in a bid to increase investor protection in the heavily retail-driven market. Hundreds of companies ditched their listing plans as a result while a handful of larger companies decided to tap international investors in Hong Kong instead. The reopening of the market, which was flagged in November, has not been a smooth ride. A number of companies have withdrawn their applications amid concerns that they were pricing deals too high, while the biggest IPO expected this month - that of Shaanxi Coal - has been halved in size twice. It will now raise just $600m, from an initially planned $3bn when it submitted its documents before the IPO freeze began. Analysts have been quick to downplay suggestions that the rush of new listings will be a major drag on Chinese equities. Most of the IPOs in the pipeline are small-cap stocks listing on the GEM board - similar to London's AIM - meaning that the impact is likely to be felt more by listed peers rather than in the wider market. Helen Zhu, equity strategist at Goldman Sachs, said structural reform and economic stability would be the two key factors driving the market this year, rather than a flood of IPOs. However, the IPO restart would probably weigh on sentiment over the short-term, she added. E&Y estimates that companies will raise a total of Rmb200bn ($33bn) this year in China from IPOs. The Shanghai Composite index dropped 1 per cent on Friday morning to 2,004, the lowest level since early August.