Shares in China South Locomotive & Rolling Stock Corp Ltd, the country's largest train maker, rose 11.5 percent in their Hong Kong trading debut on Thursday, lagging expectations, after the firm raised a combined $1.5 billion in a Hong Kong and Shanghai listing.

A robust investor response to Asia's third biggest listing this year bucked the recent gloomy trend for Hong Kong IPOs thanks to a railway investment boom in the world's fourth-largest economy and the stock's low valuation.

But the rise in China South Locomotive shares far underperformed the firm's rousing Shanghai debut on Monday, and was dragged down in part by a 1.32 percent drop early on Thursday in the Hang Seng index.

"It's fundamentally a good stock, but given the weak market sentiment it's unlikely to go any higher today. I would advise investors to lock in gains," said Patrick Shum, strategist with Karl Thomson Securities.

Many investors and issuers remain cautious on the outlook for IPOs amid uncertain global markets.

Shares in China South Locomotive rose as high as HK$3.08 ($0.39) on Thursday morning, compared with a Hong Kong IPO price of HK$2.60, which had been near the middle of an indicated range.

The share sale is Asia's third-largest this year, behind offerings from China Railway Construction Corp and India's Reliance Power Ltd.

China South Locomotive's Shanghai shares rose 58 percent in their trading debut on Monday, compared with their IPO price of 2.18 yuan. The stock closed at 3.49 yuan on Thursday in Shanghai.

The state-run company raised 6.54 billion yuan in Chinese mainland and $533 million from its Hong Kong offering, generating orders worth HK$5.8 billion from local retail investors.

China, aiming to ease transport bottlenecks caused by its surging economy, earmarked 1.25 trillion yuan for railway infrastructure in its 2006-10 five-year plan, or four times the amount under the previous five years.