BEIJING, Dec. 30 (Xinhua) -- A Chinese fund company has announced it halted participation in all initial public offering (IPO) pricing activities, a rare case in the country's securities sector, as Chinese investors moaned about excessive IPOs and their high pricing during bearish times.

The Shanghai-based Fortune SG Fund Management (FSFUND) said in a statement it has stopped participating in book building and road shows of all IPOs "in light of the current stock market situation and recent IPO pricing results."

It is the first Chinese fund company to publicly reject IPOs.

The decision was instantly welcomed by individual investors. In a poll on Sina.com, China's biggest portal website, 98 percent of more than 7,800 people surveyed as of Friday supported the move, while 88.2 percent urged regulators to suspend IPOs.

All IPOs on the mainland market must be approved by the China Securities Regulatory Commission (CSRC), the country's securities watchdog.

William Qu, managing director of investment service provider Zero2IPO Ventures, said he supported the company's decision.

"The IPO pricing on China's stock market has long been excessively high and recently issued shares have dipped blow their offering prices," he wrote on the Twitter-like Sina Weibo. "It's extremely myopic to fish in a drying pond."

China's benchmark Shanghai Composite Index plunged 22.6 percent this year, among the worst performing stock markets in the world, despite impressive growth of the Chinese economy.

In contrast, as much as 41 billion U.S. dollars were raised through IPOs on Shanghai and Shenzhen bourses, above the 30.7 billion U.S. dollars raised on the New York Stock Exchange and 30.9 billion U.S. dollars in Hong Kong, according to statistics from the London-based data tracker Dealogic.

Wang Qunhang, fund researcher with Huatai United Securities, said some other fund companies are also withdrawing from IPOs as the deals are no longer as lucrative.

Chinese investors have long been complaining about fund companies collaborating with stock issuers in overvaluing their shares during the IPO pricing process.

The average price-earning ratio of initially-offered shares on China's stock market this year was down 26 percent from last year, but was still as high as 44.62 times corporate earnings, data from financial service provider Wind Information shows.

By pushing offering prices higher, issuers can raise more money from the market while fund companies get a bigger share of the initial offerings in return.

That "win-win" practice worked when China's stock market boomed before the global financial crisis, but not when the trend reversed.

As of Thursday, 277 companies went public in Shanghai or Shenzhen this year, and 209 saw shares slump below the offering prices, the Shanghai paper First Financial Daily reported.

Among the biggest falls, Hebei-based auto company Pang Da Automobile Trade dived 86.3 percent throughout the year. On Thursday, shares of two mechanical firms tumbled 10 percent on the first day of their trading.

Unlike individual investors, who are free to sell shares on their first trading day, institutional investors can only dump the initial shares they hold after a three-month lock-up period and hence could suffer bigger losses.

While stocks continued to hit record lows, frequently launched IPOs squeezed the already strained liquidity and drew criticism from both individual investors and fund companies.

"The FSFUND's rejection of IPOs was likely an expression of its discontent with the expanding stock supply on the stock market," Wang said.

In a bid to allay investors' concerns, the CSRC said Friday it will make the IPO examinations and approvals more transparent by publicizing the prospectuses earlier and disclosing the applicants awaiting approval.

The CSRC approved more than three quarters of all IPO applications filed this year, the first time below the 80 percent percentage since 2008, according to Wind Information.

Instead of pinning unrealistic hopes on regulators to slow IPO approvals, a more rigorous stock valuation system is needed, said Zhang Yujun, general manager of the Shanghai Stock Exchange.

Authorities should improve regulation over the IPO pricing process and keep stricter credibility records of sponsors and institutional investors, Zhang said at a forum earlier this month.

"The capital market is too tilted over controlling and original shareholders (instead of ordinary individual investors), that's why a bearish market always lasts longer than a bullish one in China," he said.

Reforms seem more urgent as China's stock market is expected to bear the pressure of further economic downshift and more external turbulence next year.

China's economic growth slowed to 9.1 percent during the third quarter of the year and is expected to taper off to 8.9 percent in 2012, as the Chinese Academy of Social Sciences forecast in a report this month.

"We used to assume China's economy will go up and up for a long time," said Li Wanshou, president of venture capital Shenzhen Capital Group. "But now the speed of correction has gone beyond our imagination."