SHANGHAI (Reuters) -China’s CNOOC Ltd saw its stock surge as much as 44% in its Shanghai debut on Thursday in defiance of overall market weakness, as investors sought safety in the oil giant amid lofty energy prices and quickening inflation.

The stock started trade 20% higher than its offering price. But the Shanghai Stock Exchange almost immediately imposed a 30-minute trading suspension when the price hit the upper limit of the daily allowable band for new main-board listings, citing abnormal fluctuation.

The stock ended morning trade up 28.8% in a market that saw China’s blue-chip index shed 1.4%. CNOOC’s Hong Kong-listed stock was down roughly 3% after surging as much as 4.3%.

“CNOOC is being chased by investors who are seeking shelters in big caps with relatively low valuation and high dividends,” said Linus Yip, chief strategist at First Shanghai Group. “The stock also whets market appetite at a time when oil prices are climbing and inflation accelerating.”

China’s largest offshore oil producer raised 28.08 billion yuan ($4.41 billion) in the country’s 11th-biggest public stock offering. It said it would use the proceeds to fund one gas and seven oilfield projects in China and overseas, and to replenish capital.

“CNOOC represents historic investment opportunities due to high oil prices, low valuation, and consistent high dividend yields,” Chen Shuxian, analyst at Cinda Securities, wrote on Thursday, adding CNOOC’s market cap has potential to double over the next few years.

CNOOC starts trading in Shanghai against a backdrop of a bleak stock market that has witnessed an increasing number of stocks dipping below initial public offering (IPO) prices.

A third of the roughly 100 companies newly listed this year in Shanghai and Shenzhen dropped below offer prices on debut, showed data from East Money Information. Some, including chipmaker Vanchip Tianjin Technology Co Ltd and electronics firm Rigol Technologies Co Ltd tumbled more than 30%.

Such debut performance – in sharp contrast with the first-day pop that once featured in China’s stock markets – reflects the result of IPO reforms, as well bearish investor sentiment.

China’s tough COVID-19 containment measures at a time of heightened geopolitical risk are also roiling its stock markets, sending the main benchmark stock index down 18% so far in 2022.

Yang Hongxun, an analyst at investment consultancy Shandong Shenguang, said many stocks that slump on debut are small caps with lofty valuations, whereas CNOOC was priced modestly.

CNOOC’s Shanghai offering will make the top 10 of China’s biggest listings if a greenshoe option is fully exercised Refinitiv data showed. Its shares were priced at 10.8 yuan, 23.88 times earnings, or 1.05 times net assets.

The Shanghai sale came after CNOOC was delisted in October by the New York Stock Exchange after the U.S. government added the firm to a trade blacklist citing suspected connections to China’s military. CNOOC said it had operated in accordance with local laws.

State-backed peers PetroChina Co Ltd and China Petroleum & Chemical Corp (Sinopec) are already listed in Shanghai.

(Reporting by Jason Xue, Samuel Shen and Andrew Galbraith; Editing by Muralikumar Anantharaman and Christopher Cushing)