SHANGHAI (Dow Jones) -- China Everbright Bank Co.'s shares ended up 18%, after rising as much as 20% earlier in the day, on their first day of trading on the Shanghai Stock Exchange on Wednesday, amid renewed enthusiasm for newly listed shares following the recent recovery in the domestic stock market.

The mid-sized bank's shares ended at CNY3.66, up from their initial public offering price of CNY3.10 but off their intraday high of CNY3.72. The lender's shares opened up 8.7% from their IPO price. The benchmark Shanghai Composite Index ended down 0.2% at 2666.30.
But analysts said the lender, which raised CNY18.9 billion (U.S.$2.78 billion) in its IPO, may not be able to sustain its gains over the next few weeks because the Shanghai market could turn less favorable and the banking sector's earnings' growth may decline in the second half.
“China Everbright Bank is facing a changing market, which is strong now but has heavy profit-taking pressure at the same time,” said Li Bin, an analyst at Guolian Securities.
The Shanghai Composite Index has risen 7.9% since Agricultural Bank of China Ltd. listed on July 15 as concerns about the possibility of new tightening measures from Beijing have eased amid slowing economic growth.
The market's recent strength has benefited new listings. AgBank's shares rose just 0.1% to CNY2.70 on its first day of trading in Shanghai, but shares of Jihua Group Corp., a military uniform maker that listed in Shanghai on Monday, closed up 76% from their IPO price on their first day.
But analysts said the Shanghai market is approaching its peak as China's economic growth may slow down further in the second half. “Several banks had strong earnings in the first half, but investors are still hesitating as a possible slowdown in economic growth will drag the sector's earnings growth down,” said Zheng Ning, an analyst at Founder Securities.
Everbright Bank said Monday its first-half net profit almost doubled from a year earlier to CNY6.83 billion because of an improvement in its net interest margin, which widened to 2.12% at the end of June from 1.95% at the end of last year.
Everbright Bank sold 6.1 billion yuan-denominated A shares in its IPO and could sell another 900 million in the greenshoe, raising a further CNY2.8 billion.
The IPO met robust demand. The strategic tranche was 1.6 times covered, the retail tranche was 27.6 times covered and the institutional tranche was 10 times covered.
The IPO is China's second-largest this year after that of AgBank, which raised CNY68.5 billion in the Shanghai portion of its offering.