The New York Stock Exchange will hand over the three major telecommunications carriers in China, following an order from the U.S. government banning Americans from investing in companies it says will help the Chinese army.
NYSE has said it will suspend trade in securities issued by China Mobile, China Telecom. Corp.
CHA -0.04%
, and China Unicom Hong Kong Limited.
CHU -1.56%
at 4am on 11 January. It will work four days faster unless it receives confirmation from the Investment & Corp. Clearing Trust that the clearing house will settle trades made on January 7th and January 8th.
NYSE said it would stop trading in closed currencies and in traded commodities listed on their NYSE Arca exchange if they keep banned stock.
On Friday, China Unicom said it would release a statement in due course. China Mobile and China Telecom did not immediately respond to requests for comment.
An action order signed by President Trump in November will prohibit Americans from investing in a list of companies the U.S. government says supply and support to China’s military, intelligence and security services. The ban starts on January 11 and investors will have to withdraw their holdings by November.
There are currently 35 companies on the list – including China’s largest chip maker – as well as research, aerospace, shipbuilding, construction and technology companies.
It was unclear at first whether the order covering subsidiaries as well as parent companies and U.S. government executives contradicted how broad the blacklist should be, The Wall Street Journal reported. in December.
However, this week, the Treasury said it would blacklist subsidiaries if they were majority – or controlled – by a named company. The Treasury’s Office of Foreign Asset Control, which handles economic sanctions, also said the ban covered derivatives and investment receipts, as well as trade currencies, index funds, and other currencies. .
Last month, index collectors introduced MSCI Inc., Inc.
FTSE Russell and S&P Dow Jones Indices said they would remove some Chinese stocks from their criteria because of the order, although they did not remove shares issued by subsidiaries and affiliates.
China Mobile, which has a market value of about $ 117 billion, was not included in the original blacklist despite its parent, China Mobile Communications Group. Its U.S. stock is trading thinly compared to its Hong Kong securities, FactSet data shows. Approximately 2.1 million American investment receipts traded on average per day over the past three months, compared to 34 million Hong Kong shares per day. Each ADR is equivalent to five standard shares in Hong Kong.
Other U.S. initiatives could introduce more delistings. Last month, Mr. Trump signed legislation that could expel Chinese companies from U.S. markets if American regulators are unable to review their investigations within three years. Some Chinese companies, including Alibaba Group Holding Limited.
and JD.com Inc., Inc.
has already acquired high school listings in Hong Kong, which may help reduce the impact of such action.
Write to Chong Koh Ping at [email protected]
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