(WSJ) Shares of Nio Inc. fell by more than 3% on Thursday as the electric vehicle maker started trading in Hong Kong after a conclusion of listing by introduction.
Listing in Hong Kong by Nio was the first in the city since late 2020, as Chinese companies rush to establish a presence in the Asian countries amid delisting concerns in the US.
Nio says Hong Kong listing gives it a diversification of investor base while also broadening access to capital markets. The EV maker is now eyeing another listing by the introduction in Singapore.
The move to list by introduction, which Nio followed, is already gaining traction by Chinese firms amid market turmoil which has made it difficult to raise money at attractive prices. A company using the listing route does not need to issue new shares or raise any capital.
Co-head of Asia-Pacific equity capital markets at Citigroup says listing by introduction reflects the market situation amid low share prices.
Analyst Philippe Espinasse cautions that listing by way of introduction can subject the stock to price manipulation or arbitrage since such companies tend to exhibit low aftermarket liquidity. Since no new shares are offered, thin trading volumes can be experienced.
NIO: NYSE is down -3.42% on premarket.
