* Chinese IPOS were best and worst of 2009

 * Chinese IPOs accounted for 17 pct of 2009 U.S. volume

 NEW YORK, Dec 31  - Chinese initial public

offerings were some of the best U.S. performers of 2009, but

also some of the worst, which could make underwriters of these

deals more cautious in 2010.

 That caution could in turn create opportunities for

investors, experts said.

 Pricing on the Chinese deals will come under more scrutiny

and therefore I think you'll see better performance out of the

Chinese stocks in 2010, said Benjamin Howe, chief executive at

investment bank America's Growth Capital.

 The underwriters will pound down their pricing more based

on investor pushback and then those stocks will have more room

to move up, Howe added.

 U.S. investors were eager to buy shares of Chinese

companies, which accounted for about 17 percent of the U.S.

initial public offering market by number of deals, according to

Thomson Reuters data.

 But many portfolio managers were burned by Chinese deals

this year. Shanda Games, which was the first billion-dollar

U.S. IPO in 17 months, was one of the worst performers among

newly listed companies in 2009. Its shares now trade roughly

18.5 percent below their offer price.

 The company's performance in the IPO market is a good

example of what went wrong with the worst Chinese deals. Shanda

was carved out of China media company Shanda Interactive

Entertainment Ltd (SNDA.O), and investors were initially very


 The company made an aggressive move: it raised the number

of shares it was selling by a third. The underwriters set the

company's share price at the top of its expected range, but

that left little excess demand for the company's shares, which

meant that instead of surging on the first day of trading, they

dropped 14 percent.

 Howe said Shanda's flop would likely lead underwriters to

be more careful with pricing and leave more room for shares to

rise on their first day of trading.

 Investors are still interested in Chinese companies. The

country is still growing at a blistering pace relative to the

United States. China's GDP grew at an 8.9 percent annualized

rate in the third quarter, compared with 2.2 percent for the

United States.

 And although Shanda flopped, rival gaming company

Changyou.com Ltd (CYOU.O), was one of the very best performers

of 2009. It also priced at the top of its range but its shares

have more than doubled.


 But there were a lot more Shandas in 2009 than

Changyou.coms. Only a handful of Chinese IPOs traded up from

their offer price, and most traded down, according to Thomson

Reuters data.

 Some of the IPO gains and losses may have more to do with

when they debuted. The S&P500 has trended up since its March

bottom. Companies that launched later in the year may have had

less room to grow as the market rally slowed -- but the

companies going public may also have been weaker.

 The first companies to go public in 2009 had to be

especially strong to overcome investor skittishness, said

Richard Truesdell Jr, co-head of the global Capital Markets

Group at law firm Davis Polk & Wardwell.

 Those in the middle of the year had a bit more leeway, and

some late debuts struggled as investors closed their books and

locked in profits.

 America's Growth Capital CEO Howe expects the larger IPO

market to grow in 2010, but the proportion of deals from

Chinese companies should stay about the same next year, he


 But Shanda's weakness is unlikely to kill demand for shares

of Chinese companies, which raised about 6 percent of the

proceeds from U.S. IPOs in 2009, analysts said.

 China obviously fits into the investor mindset for growth

and I think you'll definitely continue to see more firms coming

out of that space, said Eric Guja, an analyst with

Connecticut-based research firm Renaissance Capital.

(Reporting by Clare Baldwin, editing by Dan Wilchins and

Matthew Lewis)