Investors Love Chinese Tech Stocks

(Bloomberg) -- Peer-to-peer online lender X Financial soared on its first day of New York trading, adding to a string of frenzied U.S. debuts by Chinese technology companies.

The company, based in the southern Chinese city of Shenzhen, more than doubled in early U.S. trading Wednesday. It later pared its gains to end the day 26 percent higher at $11.97. The company had raised $104.5 million after pricing its IPO at $9.50 per American depositary share, toward the bottom of the marketed range of $9 to $11.

X Financial’s sharp price movements triggered exchange circuit breakers, temporarily pausing trading twice during the morning session. It joins other Chinese firms including news aggregation app Qutoutiao Inc. and electric-car maker NIO Inc. in pricing their U.S. IPOs low, only to have their shares jump in the first few days of trading.

“A lot of people are chasing this because, although the valuations are high, if we start to see a de-escalation in the overall trade wars, then obviously these companies are going to be safe bets,” said Stephen Innes, Singapore-based head of Asia Pacific trading with Oanda Corp. “Relative to what their counterparts in the U.S. are trading at, they’re actually not too bad.”

Qutoutiao jumped 128 percent on its debut last week, when its trading was halted at least five times due to the wild swings. The company had the best first-day performance of any U.S. IPO above $5 million this year, data compiled by Bloomberg show. NIO recovered from early losses its first day and is now up 36 percent from its IPO price.

Investors Love Chinese Tech Stocks

©2018 Bloomberg L.P.