CHINA South Locomotive & Rolling Stock Corp, the nation's biggest maker of rail vehicles, gained 1 percent in its Hong Kong trading debut yesterday, worse than its first-day performance in Shanghai this week.

China South rose to HK$2.63 (34 US cents), paring earlier gains of as much as 18 percent, after selling shares at HK$2.60. Its Shanghai-listed shares surged 58 percent on Monday, the second-best debut of the year on the exchange.

The weaker performance in Hong Kong reflects the lower risk appetite of international investors compared to mainland buyers. The company raised US$1.48 billion in share sales in Hong Kong and China's mainland, as the government plans 2 trillion yuan (US$292 billion) of spending on railway systems.

"Today's (Thursday) performance is disappointing," Louis Wong, a fund manager at Phillip Securities Ltd in Hong Kong, which oversees US$40 million, told Bloomberg News. It "reflects investors' cautiousness as they're choosing to take profit on the opening."

China South raised HK$4.16 billion selling a 14-percent stake in Hong Kong. The offer price valued the company at 14 times estimated 2009 earnings, according to banks involved in the sale.