Hong Kong and China stocks slip after Xiaomi’s US$4 billion fundraising dents sentiment
- Hang Seng Index and Shanghai Composite both slipped 0.1 per cent on Wednesday
- Xiaomi recorded its biggest plunge in three weeks, declined 7.1 per cent
Hong Kong and China stocks slipped on Wednesday, led by a plunge in the shares of Chinese smartphone maker Xiaomi after it raised US$4 billion in the biggest ever top-up fundraising in Hong Kong.
“Companies with high capital expenditure issue extra shares, especially when stock prices are at relatively high levels. The news will be negative for stock prices, at least in the short term. This will be one of the investment risks for short-term traders [to watch for],” he added.
Other technology stocks dropped as well. Chinese food delivery company Meituan-Dianping fell 3.9 per cent, while JD.com declined 2.9 per cent.
Other banks also gained. Standard Chartered rose 3.3 per cent, while Hang Seng Bank gained 1.7 per cent.
In the afternoon on Wednesday, the United Kingdom became the first country globally to approve the Pfizer-BioNTech Covid-19 vaccine for use, and said that it will be rolled out from early next week.
Overnight, Wall Street indices hit record highs on the progress of fiscal stimulus measures and optimism around coronavirus vaccines, according to Reuters. The Dow Jones Industrial Average rose 0.6 per cent to end at 29,823.92 points, while the S&P 500 gained 1.1 per cent to 3,662.44. The Nasdaq Composite climbed 1.3 per cent to 12,355.11.
In Shenzhen, dairy product manufacturer Shanghai Hi-Road Food Technology soared 104.9 per cent to 143.50 yuan from its listing price of 70.03 yuan, while smart controller manufacturer Shenzhen Longtech Smart Control shot up 191.7 per cent to 164.85 yuan from its IPO price of 56.52 yuan.
In Shanghai, smart logistics systems solution provider BlueSword Intelligent Technology gained 137.4 per cent to 65.75 yuan from its listing price of 27.70 yuan, and drugs developer Shanghai Allist Pharmaceuticals rose 69.6 per cent to 38.55 yuan from its listing price of 22.73 yuan.