Xiaomi sputters in Hong Kong debut as trade war snares test case of city’s listing reform
What was billed as China’s most keenly anticipated stock sale of 2018 struggled as investors worried over risky tech stocks at a time of trade tensions
Xiaomi, the first company to raise capital under Hong Kong’s overhauled listing rules for pre-revenue start-ups or companies with multiple classes of stock, sputtered during its trading debut on the city’s exchange when investors spooked by the US-China trade war refrained from buying its shares.
Shares of the Beijing-based company, offered a week ago at HK$17 each in what was once billed as the world’s biggest initial public offer, fell by as much as 5.9 per cent in an advancing market to HK$16, before recovering to end their first trading day at HK$16.80.
“Investors are no longer that crazy about so-called new economy IPOs, as many of them have quickly fallen below their offer prices,” said Edmond Hui, chief executive for Bright Smart Securities.
“It’s no longer a guarantee of making money.”
The lacklustre debut was a blow for the world’s fourth-largest smartphone maker, which had taken a mere seven years to grow from a start-up to surpass 100 billion yuan (US$15 billion) in sales. Founded by serial entrepreneur Lei Jun in 2010, Xiaomi was the first blockbuster IPO under the new listing rules that Hong Kong’s securities regulator and stock market operator pushed through last year.