April 27 (Bloomberg) -- China Citic Bank Corp. shares almost doubled on their first day of trading in Shanghai after the company raised $5.4 billion in the world's biggest initial public offering this year.

The stock jumped to 11.37 yuan in Shanghai from the offer price of 5.8 yuan, after rising as high as 12.19 yuan. The Hong Kong-traded shares rose 14 percent to HK$6.68.

Chinese companies have raised a record $51 billion selling shares this year, taking advantage of a 70 percent rally in the benchmark stock index. Bank of Communications Ltd. attracted $188 billion of orders for its Shanghai share sale, greater than the market value of JPMorgan Chase & Co.

``We're talking about a very, very healthy corporate market,'' said Aaron Boesky, chief executive officer of Marco Polo Investment Group. ``The run-up is well deserved.''

The 1,458 companies traded on China's two exchanges boosted profits by an average 50 percent in the first quarter, said Boesky. Shenzhen Development Bank Co., controlled by buyout firm Newbridge Capital LLC, this week reported first-quarter profit more than doubled.

Investors are clamoring for new stock offerings amid first- day gains that are all but guaranteed. China Molybdenum Co. shares jumped 60 percent on their debut in Hong Kong yesterday. Country Garden Holdings Co. advanced 35 percent on its first trading day last week.

P/E 100

Today's surge brought Citic Bank's market value to $49.2 billion, making it China's fifth-biggest lender by market capitalization, according to data Bloomberg compiled. The company is valued at 100 times last year's earnings.

``People don't mind paying a bit of a premium'' if they are comfortable with the growth outlook, Binay Chandgothia, who helps manage $1.6 billion as chief investment officer at Principal Asset Management Company (Asia) Ltd., said today in Hong Kong. ``There's demand for new stocks.''

Chinese lenders including Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. saw their domestic shares surge after selling stock last year, enticing smaller rivals to follow suit. Economic growth that accelerated to 11.1 percent last quarter has increased the appeal of Chinese equities.

Mainland banks have raised about $60 billion in stock offerings in the past two years as the fastest economic growth in a decade drove demand for financial stocks. Shares of Industrial Bank, part-owned by a unit of HSBC Holdings Plc, have soared 42 percent since their debut in Shanghai on Feb. 5.

Bailing Out

A tripling in China's CSI 300 Index in the past year -- the second-best performance among world benchmarks -- has stoked enthusiasm for stocks among Chinese. Money from the nation's $2 trillion of household savings have poured into shares, helping drive prices and valuations to records.

The gains led some investors to reassess their strategy. Gao Xiqing, vice-chairman of the National Council for Social Security Fund, said his fund was selling Chinese stocks amid concerns the rally won't last, the Financial Times reported today.

Such comments may not be enough to hurt Chinese investors' appetite for equities, said Mona Chung, who helps manage about $950 million at Daiwa Asset Management Ltd. in Hong Kong.

Demand from Chinese individual investors ``is unlikely to be altered unless there is a drastic change in sentiment'' such as a ``stronger message'' from the government in tightening its monetary policies, she said today.

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net

Last Updated: April 27, 2007 04:34 EDT