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July 09, 2018

Smartphone maker Xiaomi's shares open 2.9 percent down on debut in HK

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Smartphone maker Xiaomi's shares open 2.9 percent down on debut in HK
Xiaomi founder, Chairman and CEO Lei Jun hits the gong during the listing of the company at the Hong Kong Exchanges in Hong Kong

HONG KONG (Reuters) - Chinese smartphone maker Xiaomi Corp's (HK:1810) shares dropped 2.9 percent on debut in Hong Kong on Monday, in a blow to investor sentiment for the tech sector as a raft of peers line up their own listings in the city.

Xiaomi priced its Hong Kong initial public offering (IPO) at HK$17 per share, the bottom of an indicative range, raising $4.72 billion in the world's biggest technology float in four years.

The shares touched a low of HK$16.50 in opening deals on Monday.

Xiaomi's listing comes at a delicate time for Hong Kong’s stock market, with the benchmark Hang Seng index falling 2.7 percent last week and 5.8 percent this year as investors fret over escalating trade tensions between the United States and China.

The Sino-U.S. trade dispute has roiled financial markets including stocks and currencies, and the global trading of commodities from soybeans to coal over the past several weeks.

The weak pricing values the firm, which also makes internet-connected home appliances and gadgets, at about $54 billion, almost half its original $100 billion ambition earlier this year.

Xiaomi's float failed to attract strong interest among investors with the retail tranche gathering demand that was only 9.5 times the number of shares on offer, according to its filing on Friday.

By contrast, China Literature Ltd (HK:0772), the e-book arm of Chinese gaming and social media firm Tencent Holdings (HK:0700), late last year raised $1.1 billion for its Hong Kong IPO amid heavy demand, with the retail portion being 625 times oversubscribed.

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