3 Key Reasons to Choose SGX over US and HKEX for NIO Investments Amid Market Volatility

February 20, 2024

Electric vehicle

After Nio Inc. (NYSE: NIO) (SGX: NIO) (SEHK: 9866) experienced a 39% decrease in share prices in January due to Tesla’s price cuts in China and economic worries, investors are scrutinizing their investment choices. This significant decline prompts a closer examination of the underlying factors affecting Nio’s valuation.Despite these challenges, Nio’s position in the electric vehicle sector still holds substantial appeal for forward-looking investors.

With listings in the US, Singapore, and Hong Kong, Nio’s global presence is strong. In particular, the Singapore Exchange (SGX) offers distinct advantages amidst market fluctuations, making it a preferred venue for Nio investments for several strategic reasons.

Here are three key reasons why investors should consider SGX for their NIO investments.

  1. Strong Market Performance: The SGX has shown resilience and growth in Nio’s trading activity, with a 15% increase in daily turnover, outperforming its counterparts in the US and Hong Kong. This indicates robust investor confidence and liquidity, making SGX an attractive platform for Nio investments.
  2. Lower trading costs and a substantial amount of liquidity: Nio’s bid-ask spread on SGX is 2.0 ticks (30 basis points), with a top-of-book size of US$28K. This narrow spread signifies lower trading costs and better price efficiency for investors, enhancing the attractiveness of trading NIO shares on SGX. Meanwhile, the top-of-book size indicates a substantial amount of liquidity at the immediate prices available for trading.
  3. Nio SGX leads US open price direction for most trading days: For three-quarters of the trading days since NIO is listed on SGX, NIO SGX’s Price Movement leads the direction of the NIO US open.

The combination of strong market performance, favourable trading conditions, and strategic market timing makes SGX a compelling choice for investing in NIO, offering potential benefits in liquidity, cost efficiency, and timely access to market movements. For investors aiming to leverage the EV market’s future potential, SGX offers a strategic gateway to NIO’s promising investment landscape.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of the company mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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