In the previous statement of Hang Seng Index Company, Xiaomi was only included in the Hang Seng Composite Index and some sub-indices. Whether it can be "stained blue" remains to be seen in the future. Last weekend, the Shanghai and Shenzhen Stock Exchange announced that Xiaomi was not included in the list of Hong Kong stocks. Market participants It is expected that the short-term stock price may be under pressure; for investors before the listing of Xiaomi, after the stock price has been sizzling, it may be through the derivatives such as options and futures or short-selling gains.
Xiaomi enters Hong Kong stocks and falls through
After the listing on July 9, there was market news that Xiaomi is expected to be included in the list of Hong Kong stocks. At the end of July, there will be mainland funds to buy. Many investors are expecting to have “settlement” of mainland funds. On July 13, Xiaomi continues. It surged 11.37% to close at 21.45 Hong Kong dollars. The market value once exceeded 500 billion Hong Kong dollars, but the transaction was only 7.622 billion Hong Kong dollars on the day, which has dropped significantly from the nearly 10 billion transactions that surged 13.1% on July 10.
On July 14, the Shanghai Stock Exchange and the Shenzhen Stock Exchange jointly issued the Notice on the Relevant Arrangements for the Transfer of Hong Kong Stock Connects to the Interconnection Mechanism (hereinafter referred to as the “Notice”), and decided to have Hang Seng since July 16, 2018. Among the constituent stocks of the comprehensive large-cap index, Hang Seng Composite Mid-Cap Index and Hang Seng Composite Small-Cap Index, which belong to foreign company stocks, joint securities, and stocks of different voting rights companies, they are not included in the Hong Kong stocks under Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. Through the scope of stocks, other stocks are transferred to normal transfer.
The "Notice" means that mainland funds will temporarily be unable to invest in Xiaomi through the Hong Kong stock exchange channel.
Regarding the above Notice, the Hong Kong Stock Exchange responded on the 14th: "Hang Seng Index Company announced in May that it intends to include foreign companies, bound securities, and different voting rights companies in its comprehensive index stock selection. After discussion, it was agreed that the two types of securities, namely foreign companies and stapled securities, are temporarily not included in the interconnection mechanism. HKEx has been striving to integrate with the mainland exchanges before the first different voting structure companies are listed in Hong Kong. Qualified securities reach a consensus. HKEx believes that such companies should be included in the interconnection as soon as possible."
"Overall, the Shanghai-Shenzhen-Hong Kong Stock Connect is part of the opening strategy of the national capital market and is the starting point for interconnection, not the end. The Hong Kong Stock Exchange this afternoon knows that the above notice of the Shanghai and Shenzhen Stock Exchanges will continue to work with the mainland regulators. The Exchange maintains close communication with a view to confirming the timetable for the inclusion of different voting rights companies in the Hong Kong Stock Connect as soon as possible, providing Mainland investors with access to new economic companies," the HKEx said recently.
In this regard, Boda Capital Chief Executive Wen Tianna told the First Financial Reporter that Xiaomi was not included in the list of Hong Kong stocks. In the short-term, if there is no mainland fund takeover, the stock price of Xiaomi, which had previously increased by a large margin, will be adjusted this week. pressure.
On the day of the listing of Xiaomi, Hang Seng Index Company announced that Xiaomi will be included in the Hang Seng Composite Index's multiple market capitalization and industry index, including the Hang Seng Composite Large Cap Index, as it meets the requirements of the rules for rapid inclusion in the index. This resolution will take effect on July 23.
The index constituents were originally the default investable stocks of Hong Kong Stock Connect, which made the market expect to be included in the Hong Kong Stock Connect, which is one of the reasons for the stock price speculation. Prior to this, the Hang Seng Composite Index did not include foreign companies and stapled securities, nor did it have different voting rights structure companies. The HSI said that the next step will be to study whether to include the above-mentioned types of stocks in the company's flagship index, the Hong Kong stocks iconic index, the Hang Seng Index.
Although Xiaomi has not successfully “stained blue” into the Hang Seng Index constituent stocks, in terms of market capitalization, in fact, it has already exceeded HK$400 billion in BOC Hong Kong (02388.HK) and Hang Seng Bank (00011.HK). The weights of the two companies are 1.57% and 1.55%, respectively, and the weights are ranked 18th and 19th in the Hang Seng Index.
Wen Tianna said that it is still expected that Xiaomi will need to be included in the Hang Seng Index for a certain period of time.
On the other hand, the international index preparation company FTSE Index announced that it would quickly incorporate Xiaomi into the FTSE China 50 Index, which was officially included in the index after its closing on July 13. It officially took effect on July 16, and ZTE will be eliminated on the same day. There are currently six ETFs tracking the FTSE China 50 Index with a total asset value of approximately US$4.4 billion (approximately HK$34.3 billion). Xiaomi was quickly included in the index and is expected to attract some passive funds to buy around the effective date.
Shareholders can lock in profits by “short”
For many investors before the millet F round of financing, the profit has already been between 5 times and 800 times.
Guojin Securities analyst Tang Chuan said that looking forward to the stock price performance after Xiaomi IPO, after six months of listing, it will still face tremendous pressure on the early VC and PE shareholders to reduce their holdings. Xiaomi has a total of nine rounds of preferred stock financing in history, with a total financing amount of $1.58 billion. The time for the nine rounds of financing between September 2010 and December 2014 is basically the time period when venture capital needs to exit. The cost of F-round financing in 2013 and 2014 was HK$15.83/share and HK$14.07/share, respectively.
According to the stock price of HK$21.45 last weekend, investors in the F round of financing have also made significant gains.
"The HKEx already has derivatives, futures, warrants and other derivatives of Xiaomi stocks. When it comes to this price point, the original shareholders before the listing of Xiaomi can already use these tools, or short-sell some shares to lock in profits, half a year later. When the lifting of the ban period comes, it can be calmly dealt with." A Chinese brokerage official in Hong Kong told the First Financial Reporter.
After the listing of Xiaomi, the Hong Kong Stock Exchange launched Xiaomi Futures and Options on the same day, and at the same time included the list of designated short-selling securities. In addition, five publishers have launched a total of 18 warrants on June 29, and they plan to trade on the same day. Li Xiaojia, chief executive of the Hong Kong Stock Exchange, said that the Hong Kong Stock Exchange allowed Xiaomi derivatives to be launched on the same day. It is believed that the millet trade has depth and breadth. I believe investors can hedge the risks, not special treatment. The stocks that were similarly operated last time were only ICBC (01398.HK) and AIA (01299.HK).
However, at present, there are no brokers to introduce Xiaomi's warrants, and the warrants that have been issued can only be used as speculative tools for the stock price of Xiaomi.
Wen Tianna told the First Financial Reporter that it is not ruled out that Xiaomi’s investors can use various on-board tools to hedge and even use off-exchange trading hedging; while standing on the position of the Hong Kong Stock Exchange, launching derivatives and short selling, etc. Trading methods can promote market transactions, both in terms of stocks and derivatives, and after the market increases these instruments, the price fluctuations will be even greater.