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China Shares Open Lower as Chip Giant CXMT Starts Trading

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Chinese shares opened lower on Monday following the debut of ChangXin Memory Technologies (SHA:688825) or CXMT, which analysts say drained some liquidity from the wider Chinese market.

The Shanghai Composite Index, the main gauge of Chinese stocks, opened 0.1% lower to 3,808.90. The Shenzhen Component Index slipped 6.08 points to 13,768.60.

CXMT was valued at about 579 billion yuan at the IPO price, raising 57.9 billion yuan in proceeds.

Its shares opened at 49.50 yuan apiece on their first day of trading on the Shanghai Stock Exchange, marking a jump of 472% from the IPO price of 8.66 yuan per share.

Reuters reported, citing analysts at HSBC Qianhai Securities, that the sizeable IPO is likely to divert capital away from the broader market both ahead of and during its first trading session.

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