Chinese smartphone maker Xiaomi's $10 bn IPO risks cash crunch in Hong Kong

Hong Kong interbank rates are already climbing after years at ultra-low levels as the city's monetary authority buys local dollars to defend a currency peg

Hosting what’s shaping up to be the world’s biggest initial public offering of 2018 may be a double-edged sword for Hong Kong.

Chinese smartphone maker Xiaomi Corp. is preparing a share sale that will raise at least $10 billion, people familiar with the matter said. The city’s red-hot IPO market usually sees offerings oversubscribed — sometimes by hundreds of times — as investors borrow heavily to place orders.

For clues on how this may play out, consider that China Literature Ltd’s $1.1 billion IPO last year locked up a third of the city’s monetary base, the South China Morning Post reported at