First Heavy IPO falters on government tightening

China First Heavy Industries, which makes equipment used in the mining and energy industries, fell in its first day of trading in Shanghai, bolstering speculation demand for IPOs is drying up as stocks drop.

China First Heavy, based in Northeast China's Heilongjiang province, lost 3.2 percent to 5.52 yuan, compared with a 0.5 percent gain for the benchmark Shanghai Composite Index. China First Heavy raised 11.4 billion yuan selling shares at 5.70 yuan each, less than the high end of a marketed price range of 5 yuan to 5.80 yuan.

The stock follows China XD Electric Co and China Erzhong Group Deyang Heavy Industries Co this year as the first initial public offerings (IPOs) to falter since 2004 amid concern the government will tighten monetary policy to contain inflation and bubbles in asset prices.