Daily Management Review

Xiaomi shares lose 11.8% after blacklisting in the U.S.


Shares of Chinese technology company Xiaomi fell 11.8% at the opening of trading on the Hong Kong Stock Exchange on Friday after the U.S. decision to blacklist the company, according to the exchange.

Ilya Plekhanov
Ilya Plekhanov
The day before, it became known that the U.S. administration has included nine Chinese companies, including the manufacturer of smartphones Xiaomi and aircraft corporation Comac, in the list of banned for U.S. investors because of links to the military.

The company's stock fell 11.18% to HK$29 at the start of trading but as of 10:30 local time its securities were already trading at HK$29.65 per unit.

According to Reuters, U.S. investors will have to withdraw their assets from blacklisted Chinese firms by Nov. 11, 2021.

Earlier, U.S. President Donald Trump signed an executive order that bans U.S. citizens and companies from buying securities of PRC military-affiliated firms starting January 11, 2021. According to Trump, companies associated with the Chinese military raise funds, including from U.S. investors, and claim to have their shares included in stock indexes, and then the funds go to China's military-industrial complex.

Xiaomi, a Chinese company founded in 2010, makes smartphones, tablets, and smart home products. Its IPO in July 2018 on the Hong Kong Stock Exchange was the largest in the technology industry since the 2014 initial public offering by Chinese Internet giant Alibaba.

source: reuters.com