SINGAPORE (July 2): Xiaomi, the world’s fourth largest smartphone maker, is set to trade on the Stock Exchange of Hong Kong (HKEx) on July 9. At the same time, its Chinese Depository Receipts (CDR) will start trading on the Shanghai Stock Exchange. 

CDRs are a way of bringing foreign-listed Chinese companies back home as they allow Chinese retail investors to invest in them. Search engine giant Baidu could also be among the first companies to issue the financial instruments. Baidu, which trades on the Nasdaq through American Depository Receipts (ADR), announced in documents submitted to the US Securities and Exchange Commission that it was evaluating the possibility of issuing CDRs. In early June, the Chinese press reported that Baidu had selected Huatai Securities and CITIC Securities as sponsors for the issuance of its CDRs. If it goes ahead with the issuance, Baidu will be the first Chinese company trading on Nasdaq to do so.

In the meantime, Xiaomi will become the first Chinese company to issue CDRs, following its primary listing in Hong Kong. Despite getting a lukewarm reception from retail investors in the Special Administrative Region, Xiaomi has garnered plenty of interest ahead of its IPO, through which it aims to raise US$6 billion ($8.2 billion) to US$10 billion. Among its cornerstone investors are well-known billionaires Li Ka-shing, Jack Ma of Alibaba Group Holding, and Pony Ma, chairman of Tencent Holdings, along with Xiaomi’s close business partners, China Mobile and Qualcomm

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook