The New York Stock Exchange said Wednesday it will release three Chinese telecoms companies, confirming their latest U-turn on the issue a day after U.S. Treasury Secretary Steve Mnuchin told the NYSE chief he did not agree with an earlier decision to reverse the delistings.
The latest motion, effective January 11, marks the third time in less than a week that the Big Board has ruled on the issue.
The flip-flopping clarifies the controversy over whether companies included in an order of action issued by President Donald Trump in November barred U.S. people from investing in public trading companies that Washington considers tied to the Chinese military.
It also comes amid growing tensions within Washington over Chinese policy in the final days of the Trump administration.
“There is a particular situation where there is a disruptive outside administration and (there are) orders sitting out there, so something has to be done, but no one wants to take responsibility , “said Leland Miller, Head of the U.S. – based China Beige Book.
“I think in the future anyone who receives those orders will say: ‘Tell us exactly what you want us to do,’ and stress administrations.”
The NYSE on Thursday originally announced plans to delist China Mobile Ltd, China Telecom Corp Ltd and China Unicom Hong Kong Ltd. On Monday, he made a U-turn after contacting regulators affiliated with the U.S. Treasury Foreign Fund Control Office and they decided to keep them listed. Wednesday’s decision marks a return to the original plan.
The decision to keep the companies listed had drawn criticism that the Treasury was negatively affecting China.
Mnuchin has long been seen trying to thwart the efforts of hardliners in the administration – many led by the State department – to get past Chinese companies.
But sources who asked to remain anonymous because of the sensitivity of the case said Mnuchin had called on NYSE President Stacey Cunningham Tuesday to express his concerns about the companies’ decision to relocate, as the exchange wanted more proof of the case.
“The Finance secretary was on the phone with the NYSE (president) now and was told that the NYSE would reverse their decision,” a U.S. official told Reuters Tuesday.
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On Wednesday the exchange’s executive said in a statement that its latest decision, moving forward with the delistings, was based on “new specific guidance received on January 5, 2021, issued by the Office of Foreign Asset Control. Finance for the NYSE “.
Trading in the securities will be suspended at 4 a.m. ET (0900 GMT) on Jan. 11, the NYSE said.
A spokesman for the exchange operator declined to comment further.
The flip-flopping forced investors to sell positions in the securities, and their prices fell on the first quote, then rose on the next, and fell again on Wednesday.
Republican Senator Ben Sasse, a member of the Senate Select Committee on Psychology, said the decision was the “right call”.
“Chinese companies that reject basic transparency requirements and have ties to the Chinese military should not benefit from American investment,” Sasse said.
Trump’s order of action technically comes into effect on Jan. 11 but does not prohibit buying by U.S. investors until November.
While the directive briefly stops pushing delisting, a separate bill signed into law by Trump in November will kick Chinese companies off U.S. bonds if they do not comply. in full to the country’s inspection rules in three years.
The U.S. State Department plans to release an information sheet as early as Wednesday urging U.S. investors to comply with the regulatory order, according to three people familiar with the case and a copy of the document issued. saw Reuters.
The Treasury Department said Wednesday that market intermediaries could help investors eliminate the securities of the blacklisted companies.
S&P Dow Jones Indices, which has also made a U-turn in decisions, said late Wednesday that it will remove the ADR of the three telecoms companies from their criteria by Jan. 11.
Other index makers including FTSE Russell and MSCI Inc have cut a dozen Chinese companies on the list from their criteria, but have not removed all three telecom companies, and each has a large U.S. hedge fund among the top shareholders.
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