China CNR Corp posted the smallest first-day trading gain among initial public offerings in the country this year after more than 90 sales since June cut demand for new shares.

China’s biggest maker of rail and subway cars rose as much as 6.5 percent to 5.92 yuan in its Shanghai debut, from the initial public offering price of 5.56 yuan. The average first- day gain for companies that started trading in China this year is 76 percent, according to data compiled by Bloomberg.

CNR became the second company this year to climb less than 10 percent on the first day, following China Merchants Securities Co’s 8.4 percent gain last month. Chinese companies have raised 195.5 billion yuan ($28.6 billion) in mainland IPOs this year, an 89 percent jump from 2008, making China the world’s biggest IPO market, according to Bloomberg data.

"Cash in the market is a bit tight for so many IPOs," said Zhu Xiaoming, who manages about five billion yuan at Shanghai-based Zhonghai Fund Management Co. "Besides, it’s the end of the year, most of the cash is needed to be back on the books, that takes away a large amount of cash in the market too."

The benchmark Shanghai Composite Index slipped 0.5 percent at 1:20 pm No shares have fallen on the first day of trading in a public offering in China this year.

Beijing-based CNR, which makes rail cars used in Beijing’s subway, sold 2.5 billion shares at the top of its indicated price range. It will use funds to boost train production as China spends five trillion yuan to expand its rail network to a total of about 120,000 kilometers (75,000 miles) by 2020.

'Lackluster Sentiment’

CNR is 91.2 percent owned by China Northern Locomotive, one of the companies overseen by the State-Owned Assets Supervision and Administration Commission. The company was reorganized from State-owned China Northern Locomotive & Rolling Stock Industry (Group) Corp in 2008.

"Lackluster buying sentiment in the overall market has affected investors’ interest in IPO stocks," said Han Weiqi, an analyst at CSC International Holding Ltd in Shanghai. "Meanwhile, short-term investors are especially not fond of State-owned monopoly companies."

China will own more than half of the world’s high-speed railways under the plan to expand its network. The nation accelerated its high-speed-rail development plan last year in the wake of the global financial crisis.

Spending on railroads in China is growing faster than on any other area of investment, climbing 80.7 percent to 464.6 billion yuan in the first 11 months of the year from the same period in 2008, according to the National Bureau of Statistics.

"The stock is a bit undervalued, given China’s boom on railway constructions," said Yan Ji, who helps oversee about $1.2 billion at HSBC Jintrust Fund Management Co in Shanghai. "It’s an underperformance on the first day of trading."