Chinese smartphone giant Xiaomi's shares open 2.9% down in Hong Kong debut

Chinese smartphone giant Xiaomi's shares open 2.9% down in Hong Kong debut

They later recovered most of their losses, but still closed down 1.2% despite gains in the broader market.

Still, the eight-year-old company, which has ambitions to transform itself from a low-priced maker of phones to a global rival to match Apple, managed to raise $4.72bn, making it the world's biggest technology float in four years.

Founded in 2010, Xiaomi released its first smartphone in August 2011 and has rapidly expanded its market share to become one of China's leading smartphone manufacturers. The dispute has its roots in American concerns about China's tech ambitions and its huge trade surplus with the United States.

On Monday, the Xiaomi President and co-founder, Lin Bin, told to CNBC that, "I think short-term stock price is mostly dictated by market conditions".

"At this critical moment in Sino-US trade relations, the global capital markets are in constant flux", he said.

But Mo Jia of Canalys said the IPO was a "must-go for them even though the current situation is not positive", as Xiaomi would need the cash for an ongoing global expansion as it looks to broaden its scope outside the saturated Chinese smartphone market.

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And on Monday it ended down 1.18 percent at HK$16.80, though that was much better than in mid-morning trade, when it was briefly down nearly six percent.

At Monday's closing price the company had a market value of $53.3 billion.

And Jackson Wong, at Huarong International Securities, warned there could be repercussions for Hong Kong's IPO outlook, saying a tepid start for Xiaomi would suggest a weak appetite for new listings in the city.

Xiaomi focuses on low-cost, high-performance smartphones and touts an innovative business model that features online services, a range of consumer electronics products built by partner firms, and a retail strategy that includes a network of physical stores. Meanwhile, ride-hailing company Didi Chuxing and Alibaba-affiliated digital payments firm Ant Financial are also reportedly considering IPOs.

The Chinese company was established in 2010 and is now the world's fourth-largest smartphone manufacturer by producing low-cost devices that have drawn comparisons to iPhone.

It is now the biggest smartphone vendor in India and is pushing into European markets including Spain and Russian Federation, though it has lost share in China recently to lower-cost rivals.

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