HONG KONG (Reuters) - Shares of Chinese smartphone maker Xiaomi Corp slumped as much as 10 percent on Monday after China's stock exchanges effectively ruled it out of inclusion in the stock connect scheme that links the mainland and Hong Kong exchanges.
The Shanghai and Shenzhen exchanges said on Saturday they would not expand the stock connect scheme with Hong Kong to include foreign firms, companies with different voting right structures or so-called "stapled" securities.
The news comes just a week after Chinese smartphone maker Xiaomi became the first company to list in Hong Kong with weighted voting rights (WVR) in a $4.7 billion deal following an historic rule change in the city to allow dual-class share structures.
Shares of Xiaomi fell on Monday as much as 10 percent to HK$19.40 in early trade, but recovered to trade at HK$20.55, down 4.2 percent.
The Shanghai stock exchange said it reached the decision after consulting domestic brokerages and that most investors expressed a lack of understanding of the new types of securities.
The stock connect scheme links mainland markets in Shanghai and Shenzhen with Hong Kong. There are currently 268 stocks listed on the Shanghai-Hong Kong stock connect scheme, and 417 on the Shenzhen-Hong Kong scheme.
(Reporting By Jennifer Hughes, Anne Marie Roantree and Donny Kwok; Editing by Jacqueline Wong)
Disclaimer: No Business Standard Journalist was involved in creation of this content
