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UPDATE 3-China Molybdenum triples on Shanghai debut; stock deemed undervalued

* Strong debut due to renewed speculative demand

* Trading halted after turnover breached regulatory limits

* China's economic slowdown shows little sign ofdecelerating

(Adds quotes about regulator intervention)

By Samuel Shen and Kazunori Takada

SHANGHAI, Oct 9 (Reuters) - China Molybdenum Co Ltd, backed by billionaire Yu Yong, nearly tripled onits Shanghai debut as investors deemed the stock to beundervalued after regulators ordered the company to scale backits offering to ease a glut of new issues.

The China Securities Regulatory Commission (CSRC) had ChinaMolybdenum cut the price by half at the last minute and reducethe size of the sale by five-sixths to 600 million yuan ($95million), Thomson Reuters publication IFR reported last month.

The Chinese producer of tungsten and molybdenum, used toharden steel, originally set the price at 6 yuan a share, alevel where the institutional book was fully covered, IFR said.

"This was a very rare and heavy intervention by theregulators," said Liu Li, an analyst at Yingda Securities Co."There was concern by the regulator that the offering wouldweigh on an already sluggish market. Today's market responseshows that the offering was priced too cheaply."

Shares in China Molybdenum opened at 8.70 yuan on Tuesday.Trading was halted less than an hour-and-a-half into the sessionas turnover reached 80 percent of the number of shares offered.

China Molybdenum closed at 9.63 yuan.

The company had set a pre-marketing range of 6.49-8.48 yuan,but was urged by CSRC to set the price at 3 yuan, according toIFR.

More than 137 institutional investors, including Shanghai AJCorp and Fullgoal Fund Management Co., subscribed tothe shares at the offer price last month.

The lower-than-expected price stirred speculative interestin the stock, said Zhang Fang, an analyst at DongxingSecurities.

Neither China Molybdenum nor CSRC could be immediatelyreached for comment.

ECONOMIC SLOWDOWN

For China Molybdenum , it wouldn't have been wiseto postpone the Shanghai IPO as China's economic slowdown weighson the market in the longer term, analysts said.

The Shanghai Composite Index is down 3.8 percent sofar this year, after falling about 22 percent last year. Theindex rose 2 percent on Tuesday.

Dongxing Securities expects China Molybdenum, partly ownedby private equity firm Cathay Fortune Corp (CFC) founded bybillionaire Yu, to report a 2 percent net profit drop this yeardue to feeble demand for the metal.

Chinese steel-related firms have been struggling to postprofits this year as slowing economic growth erodes demand fromkey downstream sectors like real estate and automobiles. Theyare also struggling with long-term structural issues includingchronic over capacity.

Essence Securities led the China Molybdenum deal, with BOCInternational (China) and China Merchants Securities also actingas joint bookrunners, IFR reported.

(Additional reporting by Elzio Barreto in HONG KONG; Editing byRyan Woo)

((jianxin.lu@thomsonreuters.com)(86 21 6104 1792)(ReutersMessaging: jianxin.lu.thomsonreuters.com@reuters.net))

Keywords: CHINA MOLYBDENUM/IPO