By Senad Karaahmetovic

Nio (NYSE 🙂 has announced it will become a constituent stock starting June 13th 2022.

It represents 30 of the largest technology companies that are listed in Hong Kong. Nio will, however, be included as a constituent stock in the Composite Index.

Morgan Stanley analyst Tim Hsiao said such a decision was “well expected” and will give more liquidity and “a bit more diversity.”

“Index inclusion should attract some directional shift of passive funds tracking index that could bolster near-term liquidity of H-shares (US$54mn for Nio’s H-share vs. US$176mn for the ADR over the past 3 months). The stock’s previous SGX Listing could attract high-net worth investors. NIO, having been triple-listed means that it is better equipped to protect against ADR delisting risk. All eyes are still on potential A-share listing which will take longer to eventuate,” Hsiao said in a client note.

Pre-market Monday saw Nio’s stock prices rise 0.7%