China Everbright Bank soared as much as 20 percent on its Shanghai debut yesterday - and even outshone the Agricultural Bank of China - as the second-biggest initial public offering in China took advantage of a recovering market.

The bank shares posted an intraday high of 3.72 yuan (55 US cents) yesterday, a rise of 20 percent from an offer price of 3.10 yuan. The bank ended 18.06 percent higher at 3.66 yuan yesterday in Shanghai. The Shanghai Composite Index lost 0.21 percent to 2,666.30.

Citic Securities Co said the bank's reasonable price range should be between 3.30 yuan and 3.60 yuan.

"The bank enjoys a huge growth potential due to its rapid network expansion," Citic Securities said yesterday in a research report.

Everbright bank sold 6.1 billion shares in Shanghai before exercising an over-allotment option. The bank can expand the sale to as many as 7 billion shares, or 21.7 billion yuan, after the over-allotment.

Everbright outperformed the AgBank on its debut performance. AgBank, China's biggest lender by network, inched up 0.8 percent on its debut in Shanghai on July 15. AgBank posted the worst first-day performance among the 10 listed Chinese banks.

Everbright Bank's 18.9 billion yuan IPO marked the second biggest share sale in China this year, following AgBank's massive US$22.1 billion dual offering in Shanghai and Hong Kong. The Shanghai Composite has been recovering since early July after dropping 28 percent this year so far. The index has gained 11 percent since July. The gauge is the worst performer among the world's 10 biggest markets this year.

If not for the IPO Everbright Bank said earlier it would face a shortage of capital in the next three years. The bank's capital adequacy ratio could rise to 11.9 percent after the IPO, above the regulatory norm of 10 percent.