For a long time there was no such important news for the Chinese manufacturer of smartphones and technology Xiaomi: the United States agreed to exclude the corporation from its sanctions list. Today we will share details about this event and tell you what is happening with the company’s quotes against the background of such information.
Xiaomi is no longer on the blacklist?
On May 12, Bloomberg published an article that representatives of the US government and the Xiaomi corporation had reached an important agreement. According to the agreement, the technology giant will be removed from the list of Chinese companies, investments in which are prohibited by American legal entities and individuals.
According to the financial publication, the Pentagon agreed with the relevance and justification of the final order to exclude this Chinese company from the blacklist. Official statements from all parties will be announced by May 20.
When and how did Xiaomi come under sanctions?
On November 12, 2020, Donald Trump signed a decree prohibiting Americans and American firms from carrying out any transactions with the securities of Chinese companies that, according to the US government, belong to or cooperate with the armed forces of the Celestial Empire.
On January 15, 2021, Xiaomi, along with eight other organizations from the PRC, was included in the black list, which was prepared by the Ministry of Defense. On the same day, the tech corporation’s quotes plummeted 10.26%.
However, on March 13, 2021, according to Reuters, the Federal Court suspended the ban on American investors from buying shares and cooperating with Xiaomi. The stocks of the smartphone and technology maker gained 7.25%.
Xiaomi stock technical analysis
On May 12, stocks of Xiaomi (HK: 1810) rose 6.1% to 26.1 Hong Kong dollars (HKD) amid news of the withdrawal from US sanctions. The next day, quotes dipped 2.87% to HKD 25.35. Today, at the time of writing, the stock is trading at HKD 25.9, up 2.17%.
Analyst Maksim Artyomov’s opinion on the prospects for the shares of the Chinese giant:
“Xiaomi shares continue to bounce off the 200-day moving average. This signals the exit of quotes from the sideways trend and the beginning of a new upward impulse.
On the technical side of the analysis, over the last time the quotes have been forming a “Wedge” pattern – a breakdown of the resistance level will give a signal to start working out the pattern. The target for further growth will be the 36 Hong Kong dollar mark. At the same time, correction should not be ruled out in the process of reaching maximum values.
In the medium term, given favorable economic and political factors, shares may renew their historical maximum and continue to strengthen in price. “
Summing up the result
On May 12, it became known that Xiaomi will be excluded from the list of Chinese companies with which investment and business activities of American individuals and legal entities are prohibited. This news provoked a rise in the price of shares of the corporation from the Celestial Empire by 6.1%.
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