Xiaomi is set to make a bad start to its trading debut in Hong Kong on Monday.
Shares in the Chinese smartphone maker were set to drop 2.4% from their listing price, according to stock exchange data. The listing price was already at the bottom of the range the company had sought.
Xiaomi’s IPO raised $4.7 billion at a valuation of about $54 billion, far lower than the big numbers that had been reported earlier in the year.
The company’s trading debut comes as global stock markets have been roiled by the escalating trade clash between the United States and China. The dispute has its roots in American concerns about China’s tech ambitions and its huge trade surplus with the United States.
Hong Kong’s benchmark index has fallen more than 10% since early June.
Xiaomi CEO and co-founder Lei Jun acknowledged the unfortunate timing in a letter to employees Sunday that said, “Our IPO also comes with huge challenges and heavy responsibilities.”
“At this critical moment in Sino-US trade relations, the global capital markets are continuously changing,” he added.
Xiaomi has also faced questions from analysts over its ability to increase profit margins in the future, given that much of its smartphone sales are at the lower end of the market.
CNNMoney (Hong Kong) First published July 8, 2018: 9:28 PM ET
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