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Huawei supplier surges in Hong Kong after cancelling NYSE listing

Hong Kong

A MAJOR Chinese chipmaker surged in Hong Kong amid prospects that its decision to stop trading in New York will attract more volume to its main listing.

Shanghai-based SMIC, whose big-gest customer is the parent of Huawei Technologies Co, the high-profile subject of a US ban, was among the top gainers on the MSCI China Index with a 10 per cent rally on Monday.

"The rise in the shares today is mainly due to expectations that US trades in the stock will be funnelled over to the Hong Kong-listed company, meaning more demand for the Hong Kong-listed stock," CSC International Holdings analyst Zhu Jixiang said. The decision could also be linked to the escalation in Sino-US trade tension, he said.

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"SMIC is one of the top foundries, and right now semiconductors are a sensitive area," Mr Zhu said. "The company executives might be retreating to save themselves potential worries in the future - after all, being listed in the US means they are subject to securities regulation and frequent executive travel to the US."

SMIC did not respond to calls for comment.

Data compiled by Bloomberg show that SMIC gets about 18 per cent of its revenue from Huawei. BLOOMBERG