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Shares of Xiaomi rally after being included in the Hang Sang Composite Index
Shares of Chinese smartphone maker Xiaomi rallied after closing below the company’s initial public offering price on July 9. Shares of Xiaomi rose to HK$18.42 in an intra-day trading after closing at HK$16.8 the previous day.
The rally came after that Hang Seng Indexes Company announced on July 9 to include Xiaomi in the Hang Seng Composite Index, Hang Seng Global Composite Index, and Hang Seng Internet & Information Technology Index. According to the company statement, the changes will be made after market close on 20 July 2018 and come into effect on 23 July 2018.
Hang Seng Composite Index covers the top 95th percentile of the total market capitalization of the Hong Kong stock market, compared with the better-known Hang Seng Index, which consists of only 50 companies listed on the exchange. Hang Seng Internet & Information Technology Index is under the Hang Seng Composite Index, sub-index of Hang Seng Composite Index. Hang Seng Global Composite serves as a benchmark that reflects the overall performance of all companies including foreign companies listed in Hong Kong.
Xiaomi’s IPO has been clouded by its Chinese CDR delay and weak performances of Hong Kong and Mainland China’s stock market. The smart manufacturer abruptly postponed its plan to list on China’s stock exchange. According to Reuters, it was mainly because of a dispute over the valuation of the CDRs between the company and the regulator. The company priced Hong Kong IPO at bottom of its target range.