Weibo shares close 7.2% lower on Hong Kong debut – Community News
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Weibo shares close 7.2% lower on Hong Kong debut

The logo of the Chinese social media app Weibo can be seen on a mobile phone in this illustration photo, taken on December 7, 2021. REUTERS/Florence Lo

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HONG KONG, Dec. 8 (Reuters) – Shares of Chinese social media giant Weibo Corp closed 7.2% below their issue price in Hong Kong on Wednesday as it became the last US-listed Chinese stock looking for a secondary listing closer to home.

Its Hong Kong debut was in line with Weibo’s primary listing in New York (WB.O) falling after a scorching week for US-listed Chinese stocks, which face tighter oversight by US regulators and also under pressure from the Chinese authorities.

Raising $385 million for its Hong Kong listing, Weibo opened at $256.20 and closed at HK$253.2 after a volatile debut session.

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The shares were priced at HK$272.80 each in the secondary listing in which 11 million shares were sold.

“For Weibo, it’s a matter of timing. The market in Hong Kong had started to recover this week and now we are seeing some softness emerging in the market,” said Louis Tse, director of Wealthy Securities in Hong Kong.

Weibo’s decline came as the Hang Seng Index (.HSI) in Hong Kong closed 0.06% higher on Wednesday, while the Tech Index (.HSTECH) was 0.03% higher.

Some major stocks, such as Alibaba Group Holdings (9988.HK), fell 4.35% but fell sharply as sentiment towards tech majors remains fragile.

“The Hong Kong listing market is very lukewarm at the moment,” said Dickie Wong, executive director of Kingston Securities.

“In addition, there is regulatory pressure from the (US Securities and Exchange Commission) on Chinese companies to disclose virtually everything within three years.

“So there is a big trend that most of the US-listed Chinese companies will seek secondary or dual primary market in Hong Kong so that they can exit the US market if necessary.”

Ride-hailing giant Didi Global (DIDI.N) decided last week to delist from New York, succumbing to pressure from Chinese regulators concerned about data security and denting sentiment on Chinese stocks.

According to data from Refinitiv, Hong Kong and China’s mainland STAR Market have attracted $15.2 billion in secondary listings from US-listed Chinese companies so far this year.

“The moves are likely based on the growing recognition that the disconnect between the US and China will not stop and will continue steadily,” said LightStream Research analyst Mio Kato, who publishes on Smartkarma.

“I expect a continuous flow of offers from New York to Hong Kong over the next two years.”

The US government is advancing plans to remove Chinese companies from the list if they fail to comply with the country’s auditing rules, which could affect more than 200 companies.

Chinese companies listed on US exchanges must disclose whether they are owned or controlled by a government agency, and provide evidence of their audit inspections, the Securities and Exchange Commission (SEC) said last week.

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Reporting by Scott Murdoch and Donny Kwok; adaptation by Richard Pullin and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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