By ShanghaiGuy - Sat Dec 26, 3:17 pm

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Edited byShanghaiGuy

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Despite the fall in the index on Friday, gaining Shanghai A shares outnumbered losers by 473 to 374, while turnover fell to 101 billion yuan from an already moderate 123 billion yuan on Thursday, indicating investors focused on small-cap shares.

Shenzhen Gas, a liquefied gas distributor that listed a 900 million-yuan IPO in Shanghai on Friday, closed up 118 percent at 15.17 yuan from its IPO price of 6.95 yuan, easily beating an average analyst forecast of only 8.5 yuan and betraying clear signs of heavy speculation in new shares that has been common in China’s nascent stock market.

Shenzhen Gas is now valued at 101 times its 2008 earnings compared with an average historical price earnings ratio of 38 times for China’s power utility counters. Its forecast PE for 2009, based on analysts’ estimates, reached 80 times compared with a sector average of 33 times.

A second batch of eight companies debuting on China’s Nasdaq-style ChiNext market in Shenzhen on Friday jumped between 33 and 64 percent, with software maker Beijing Supermap Software Co 300036.SZ the biggest gainer with a jump to 32.20 yuan from its IPO price of 19.60 yuan.

Leading the losers on Friday was chemical raw materials maker Tanshan Sanyou Chemical Industries Co (600409.SS), which closed down 6.86 percent at 8.55 yuan after the company unexpectedly said late on Thursday that it had given up a previously announced plan to acquire control of a chemical fiber maker.

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