UPDATE 2-Polish PGE jumps 14 pct in Europe's top 2009 IPO
* Shares rise 14 pct to 26.22 zlotys
* PGE becomes largest listed Polish company
* Europe's top IPO this year; world number 5
(Adds quote, details, graphic, updates shares)
By Patryk Wasilewski and Pawel Bernat
WARSAW, Nov 6 (Reuters) - Shares in Poland's top utility PGE PGEPa.WA jumped as much as 14 percent in heavy trade on their debut on the Warsaw bourse on Friday, a bright start for Europe's largest initial public offer (IPO) this year.
The debut caps PGE's heavily oversubscribed 6 billion zlotys ($2.1 billion) listing, which is serving as an important test of investor interest in Europe after the IPO market nearly dried up due the financial turmoil that swept the markets a year ago.
PGE's debut is also the fifth largest this year in the world, where Europe's IPO market still lags that of Asia and the United States.
For a graphic on IPOs globally click
Poland's Treasury Minister Aleksander Grad said more large IPOs are in the pipeline with region's largest insurer PZU and Poland's second largest utility Tauron due to list in first half of 2010.
"Treasury has sent stakes worth some 14 billion zlotys on the Warsaw bourse in last two years. We are not going to stop at that, in the first half of next year we will be listing PZU and Tauron," Grad said during the debut.
Earlier this week, Dutch insurer Delta Lloyd NV (DLL.AS) made a lacklustre market debut in Europe's second largest IPO in 2009. [ID:nL3529121].
PGE's strong start after Poland's largest share sale in five years also makes it Warsaw's largest Polish company listed on the Warsaw stock exchange with a market capitalisation of some $15.7 billion.
Czech utility CEZ (CEZPsp.PR)CEZP.WA, which has a secondary listing in Warsaw, is valued at more than $28 billion.
By 1051 GMT, PGE rose 13 percent to 25.98 zlotys per share, in line with analyst expectations in a Reuters poll. Turnover topped 1.8 billion zlotys.
Despite a robust debut, PGE has a small chance to be included into Warsaw's main WIG20 .WIG20 index this year, which would require the value of PGE's free float to exceed 5 percent of the value of companies already in the index.
Inclusion in the index would allow funds that track the main Polish index to invest in the stock, supporting its share price. Expectations of PGE's eventual inclusion helped support the offering.
PGE is Poland's largest power producer, generating 42 percent of its energy, and needs to fund extensive modernisation of outdated and heavily polluting coal-fired generators as well as Poland's first nuclear power plant.
The issue was managed by Unicredit CAIB (CRDI.MI) and Goldman Sachs (GS.N).
GLOBAL REBOUND
With market volatility, measured by VIX .VIX returning to 25 from a low of 20 three weeks ago, investors are becoming more cautious on taking risk in companies without trading records.
"The debut of PGE is a positive sign, but it's too early to speak of a recovery," said Julie Teigland, a strategic growth markets leader at Ernst & Young.
Still, IPO flow is gaining momentum in the last two months of 2009, with at least three IPO candidates looking to raise over $3 billion. (Additional reporting by Daisy Ku) (Editing by Jon Loades-Carter and Andrew Calus) ($1=2.872 Zloty)
