Shares of Chinese selfie app provider take wild ride
Index publisher flip-flops on Meitu, putting shares back on roller-coaster
CHINATSU HAYASHI, NQN staff writer
HONG KONG -- The Hong Kong-listed shares of Meitu began seesawing this week as an index publisher decided to, then against including the Chinese selfie app provider in its MSCI China Index.
MSCI is a U.S. company that publishes a number of indexes and provides equity analysis tools.
On Tuesday it decided against including Meitu in its China index.
The next day, Meitu's shares dropped more than 10%, hitting 9.70 Hong Kong dollars, their lowest point in three months.
MSCI's latest action was seen as a slap in the face to investors, coming a day after the company had said it would add the company to its China index beginning June 1. This initial announcement resulted in a 4% rise in Meitu's share price.
Meitu's shares continued their yo-yo act on Thursday morning, gaining more than 2% from Wednesday's close, to HK$10.02, after having kicked off the day's trading with a 1.42% decline.
MSCI did not provide details on why it reversed its decision. An MSCI spokesperson said in an email response to the Nikkei Asian Review that "Following additional analysis and taking into account the 180-day lock-up period for pre-IPO investors of Meitu, MSCI confirmed that the company was no longer eligible for inclusion to the MSCI Global Standard Indexes as part of the May 2017 Semi-Annual Index Review."
"In particular, the company did not meet the Global Minimum Foreign Inclusion Factor Requirement after the lock-up adjustment."
Meitu's stock volatility is nothing new to investors. The shares have been on a bumpy ride for two months now. On March 6, they became available to investors in Shanghai and Shenzhen via Hong Kong, and were quickly bought by mainland speculators. Meitu shares shot up to HK$18 in mid-March, an all-time-high since going public on Dec. 15.
Nikkei staff writer Mariko Tai in Hong Kong contributed to this report.